Question - Waheed Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour.
The following data are available for 2008:
Budgeted manufacturing overhead costs $4,000,000
Budgeted machine-hours 200,000
Actual manufacturing overhead costs $3,860,000
Actual machine-hours 195,000
a) Calculate the budgeted manufacturing overhead rate.
b) Calculate the manufacturing overhead allocated during 2008.
c) Calculate the amount of under- or overallocated manufacturing overhead.