Buller Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2019: Budgeted manufacturing overhead costs Budgeted machine-hours Actual manufacturing overhead costs Actual machine-hours Required: $4,800,000 180,000 $3,990,000 150,000 1. Calculate the budgeted manufacturing overhead rate. 2. Calculate the manufacturing overhead allocated during 2019. 3. Calculate the amount of under- or overallocated manufacturing overhead. Why do Buller’s managers need to calculate this amount?
Buller Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2019: Budgeted manufacturing overhead costs Budgeted machine-hours Actual manufacturing overhead costs Actual machine-hours Required: $4,800,000 180,000 $3,990,000 150,000 1. Calculate the budgeted manufacturing overhead rate. 2. Calculate the manufacturing overhead allocated during 2019. 3. Calculate the amount of under- or overallocated manufacturing overhead. Why do Buller’s managers need to calculate this amount?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Buller Company uses normal costing. It allocates
Budgeted manufacturing overhead costs Budgeted machine-hours
Actual manufacturing overhead costs Actual machine-hours
Required:
$4,800,000 180,000 $3,990,000
150,000
1. Calculate the budgeted manufacturing overhead rate.
2. Calculate the manufacturing overhead allocated during 2019.
3. Calculate the amount of under- or overallocated manufacturing overhead. Why
do Buller’s managers need to calculate this amount?
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