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    Herbivore Manufacturing Job Costing System: Budgeted manuf

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    2. Consider the following selected cost data for the Herbivore Manufacturing Company for 2011:

    Budgeted manufacturing overhead costs $8,500,000
    Budgeted machine hours 350,000
    Actual manufacturing overhead costs $8,100,000
    Actual machine-hours 335,000

    The company uses normal costing. Its job-costing system has a single manufacturing overhead cost pool. Costs are allocated to jobs using a budgeted machine hour rate. Any amount of under- or overallocation is written off to Cost of Goods Sold.

    a. Compute the budgeted manufacturing overhead rate.
    b. Prepare the journal entries to record the allocation of manufacturing overhead.
    c. Compute the amount of under- or overallocation of manufacturing overhead. Is this amount material?
    d. Prepare the journal entry to record the disposal of the under- or over-allocated manufacturing overhead.

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