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Budgeted factory overhead of SOLANO Corp. was $399,600 and the budgeted machine-hours were 27,750. Actual factory...

Budgeted factory overhead of SOLANO Corp. was $399,600 and the budgeted machine-hours were 27,750. Actual factory overhead was $431,880 and actual machine-hours were 28,575. Solano Corporation applies overhead based upon machine-hours. Before disposition of under/overapplied overhead, the cost of goods sold was $840,000 and ending inventories were as follows:


Direct materials $ 90,000

WIP 285,000

Finished goods 375,000

Total $750,000


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.
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