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    Overhead calculations

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    4.19 Waheed Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rater 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

    1. Calculate the budgeted manufacturing overhead rate.
    2. Calculate the manufacturing overhead allocated during 2008.
    3. Calculate the amount of under- or overallocated manufacturing overhead.

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    Solution Preview

    4.19 Waheed Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rater per machine-hour. The following data are available for 2008:
    Budgeted manufacturing overhead costs $4,000,000
    Budgeted ...

    Solution Summary

    The solution explains how to calculate the budgeted overhead rate, overhead applied and under or over applied overhead.

    $2.19

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