Overhead Variance (Over-or Underapplied), Closing to cost of goods sold At the end of the year, Eates Company provided the following actual information: Overhead                    $412,600 Direct labor cost            532,000 Estes uses normal costing and applies overhead at the rate 75% of direct labor cost, At the end of the year, Cost of goods sold(before adjusting for any overhead variance) was $1,670,000. Required : 1. Calculate the overhead variance for the year  2. Dispose of the overhead variance by ajusting Cost of goods sold.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 4PA: Factory overhead cost variance report Tiger Equipment Inc., a manufacturer of construction...
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Overhead Variance (Over-or Underapplied), Closing to cost of goods sold

At the end of the year, Eates Company provided the following actual information:

Overhead                    $412,600

Direct labor cost            532,000

Estes uses normal costing and applies overhead at the rate 75% of direct labor cost, At the end of the year, Cost of goods sold(before adjusting for any overhead variance) was $1,670,000.

Required :

1. Calculate the overhead variance for the year 

2. Dispose of the overhead variance by ajusting Cost of goods sold.

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