Question - The Hatch Manufacturing Company has the following budgeted overhead cost and other data for its machining department for the month of December:
Budgeted Data:
Indirect labor and supplies $70,000
Factory rent $19,000
Supervision $84,000
Depreciation on equipment $139,000
Cost-allocation base for overhead application Machine hours
Budgeted overhead application rate $6 per machine hour
Other Data:
Actual machine hours during December 68,000
Actual overhead cost incurred during December $439,000
Compute the total budgeted machine hours, total applied overhead cost, and indicate how any difference between the actual overhead cost incurred and applied overhead would be treated on Hatch's income statement for the month of December.