Cornerstones of Cost Management 4th Ed. - Chapter 4 Scenario II: Goodmark Company produces two types of birthday cards: scented and regular. Goodmark uses the Overhead Control account to accumulate both actual and applied overhead. The company has the following data for the past year: Actual overhead $760,000 Sales $3,500,000 Materials used $1,100,000 Applied Overhead (in each account): Work in process $72,000 Finished goods 216,000 Cost of goods sold 432,000 Required:
Cornerstones of Cost Management 4th Ed. - Chapter 4 Scenario II: Goodmark Company produces two types of birthday cards: scented and regular. Goodmark uses the Overhead Control account to accumulate both actual and applied overhead. The company has the following data for the past year: Actual overhead $760,000 Sales $3,500,000 Materials used $1,100,000 Applied Overhead (in each account): Work in process $72,000 Finished goods 216,000 Cost of goods sold 432,000 Required:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cornerstones of Cost Management 4th Ed. - Chapter 4
Scenario II: Goodmark Company produces two types of birthday cards: scented and regular. Goodmark uses the
Actual overhead | $760,000 | |
Sales | $3,500,000 | |
Materials used | $1,100,000 | |
Applied Overhead (in each account): | ||
Work in process | $72,000 | |
Finished goods | 216,000 | |
Cost of goods sold | 432,000 |
Required:
1. | Calculate the overhead variance for the year and label it under- or overapplied. | |||||||||||||||
Overhead variance: $ ________ (underpaid or overpaid) | ||||||||||||||||
2. | Assuming the variance is not material, the following closing entry would be made: | |||||||||||||||
Debit _________ for $___________ and credit _______ for $ __________ | ||||||||||||||||
3. | If the overhead variance is material, indicate how much of the variance would be __________ to each of the following accounts (if an amount is zero, enter "0"): | |||||||||||||||
|
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