Schulz Corporation Applies Overhead Based Upon Machine-Hours Required:
A

Essay

Schulz Corporation applies overhead based upon machine-hours.Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500.Actual factory overhead was $287,920 and actual machine-hours were 19,050.Before disposition of under/overapplied overhead,the cost of goods sold was $560,000 and ending inventories were as follows:
$$\begin{array} { l r } \text { Direct materials } & \$ 60,000 \\\text { WIP } & 190,000 \\\text { Finished goods } & 250,000 \\\text { Total } & \$ 500,000 \\\hline\end{array}$$ Required:
a.Determine the budgeted factory overhead rate per machine-hour.
b.Compute the over/underapplied overhead.
c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach.
d.Prepare the journal entry to dispose of the variance using the proration approach.