Smith Company applies overhead based on machine hours. The following data was available:
Budgeted factory overhead $266,400
Budgeted machine hours 18,500
Actual factory overhead $287,920
Actual machine hours 19,050
Cost of goods sold $560,000
Direct materials inventory, ending balance $60,000
Work-i n-process inventory, ending balance $190,000
Finished goods inventory, ending balance $250,000 Required:
A) Compute the budgeted factory overhead rate.
B) Compute the underapplied or overapplied factory overhead.
C) Under the immediate write-off approach to overhead variances, how would you dispose of the overhead variance?
D) If the immediate write-off approach to overhead variances is not used, how would you dispose of the overhead variance?