Budgeted manufacturing overhead rate, allocated manufacturing overhead. Taylor Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2017: Budgeted manufacturing overhead costs $3,800,000 Budgeted machine-hours 200,000 Actual manufacturing overhead costs $3,660,000 Actual machine-hours 196,000 1. Calculate the budgeted manufacturing overhead rate. 2. Calculate the manufacturing overhead allocated during 2017. 3. Calculate the amount of under- or overallocated manufacturing overhead. Why do Taylor’s managers need to calculate this amount?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
4-24 Budgeted manufacturing
normal costing. It allocates
following data are available for 2017:
Budgeted manufacturing overhead costs $3,800,000
Budgeted machine-hours 200,000
Actual manufacturing overhead costs $3,660,000
Actual machine-hours 196,000
1. Calculate the budgeted manufacturing overhead rate.
2. Calculate the manufacturing overhead allocated during 2017.
3. Calculate the amount of under- or overallocated manufacturing overhead. Why do Taylor’s managers
need to calculate this amount?
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