88) Russell Company had the following balances as of December 31, 20X5.

Cost of goods sold$500,000

Direct-materials inventory100,000

WIP inventory340,000

Finished goods inventory160,000

Factory department overhead control50,000 Cr.

Required:

a. Does the variance represent over- or underapplied overhead?

b.Prepare the entry to dispose of the variance using the proration method.

c.What effect, if any, did the entry in part b have on gross profit?



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