Question - Overhead Variance (Over- or Underapplied), Closing to Cost of Goods Sold
At the end of the year, Ilberg Company provided the following actual information:
Overhead: 456500
Direct Labor: 607,200
Ilberg uses normal costing and applies overhead at the rate of 75% of direct labor cost. At the end of the year, Cost of Goods Sold (before adjusting for any overhead variance) was $905,000.
Required:
1. Calculate the overhead variance for the year.
2. Dispose of the overhead variance by adjusting Cost of Goods Sold.