Schrader, Inc uses a budgeted factory-overhead rate to apply overhead to production. The following data are available for the year ended December 31, 2010.
- Budgeted factory overhead $675,000
- Actual factory overhead $716,000
- Budgeted direct-labor costs $450,000
- Actual direct-labor costs $432,000
- Budgeted direct-labor hours 12,500
- Actual direct-labor hours 13,325
Required:
a. Determine the budgeted factory overhead rate based on direct-labor costs (show as a percentage).
b. Determine the budgeted factory overhead rate based on direct-labor hours (show as $/hr).
c. What is the applied overhead based on direct-labor costs?
d. What is the applied overhead based on direct-labor hours?
e. Assuming the variance is immaterial, give the journal entry to write off the variance based on direct-labor hours.