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Required: (1) Based upon above given information, determine under-applied or over-applied factory overhead. (ii) (iii) Pass general journal entry to close factory overhead applied account at the end of year. Pass general journal entries to dispose off under applied or over applied factory overhead in the following cases: (a) The variance is considered as a significant amount (b) The variance is considered as an insignificant amount (c) The variance is considered as cause by poor scheduling of production and excessive spending

Required: (1) Based upon above given information, determine under-applied or over-applied factory overhead. (ii) (iii) Pass general journal entry to close factory overhead applied account at the end of year. Pass general journal entries to dispose off under applied or over applied factory overhead in the following cases: (a) The variance is considered as a significant amount (b) The variance is considered as an insignificant amount (c) The variance is considered as cause by poor scheduling of production and excessive spending

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vinubhai 

XYZ Enterprises applies factory overhead @ 60% of direct labour cost. During the year 2016 following actual costs were recorded: (Rs.) 580000 Direct Labour cost Factory Overhead cost 428000 At the end of the year following balances appear in the some of the Control Accounts: Cost of Goods Sold 1750000 Finished Goods Work in Progress Required: (i) (ii) 500000 250000 Based upon above given information, determine under-applied or over-applied factory overhead. Pass general journal entry to close factory overhead applied account at the end of year. Pass general journal entries to dispose off under applied or over applied factory overhead in the following cases: The variance is considered as a significant amount The variance is considered as an insignificant amount The variance is considered as cause by poor scheduling of production and excessive spending (a) (b) (c)
Transcribed Image Text:XYZ Enterprises applies factory overhead @ 60% of direct labour cost. During the year 2016 following actual costs were recorded: (Rs.) 580000 Direct Labour cost Factory Overhead cost 428000 At the end of the year following balances appear in the some of the Control Accounts: Cost of Goods Sold 1750000 Finished Goods Work in Progress Required: (i) (ii) 500000 250000 Based upon above given information, determine under-applied or over-applied factory overhead. Pass general journal entry to close factory overhead applied account at the end of year. Pass general journal entries to dispose off under applied or over applied factory overhead in the following cases: The variance is considered as a significant amount The variance is considered as an insignificant amount The variance is considered as cause by poor scheduling of production and excessive spending (a) (b) (c)
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