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10 April, 08:04

Warner Company has the following data for the past year:

Actual overhead $470,000

Applied overhead:

Work-in-process inventory $100,000

Finished goods inventory 200,000

Cost of goods sold 200,000

Total $500,000

Warner uses the overhead control account to accumulate both actual and applied overhead.

Calculate the overhead variance for the year.

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  1. 10 April, 08:29
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    The overhead variance for the year is $ 30000 and is Favorable/overapplied.

    Explanation:

    Overhead variance = Actual overhead - Applied overhead

    = $470,000 - $500,000

    = - $30000

    Therefore, the overhead variance for the year is $ 30000 and is Favorable/overapplied.
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