Gammaro company uses normal costing. it allocates manufacturing overhead cost using a budgeted rate per machine-hours.the following data are available for 2017 : Budget manufacturing overhead costs $4.600.000 Budgeted machine-hours 184.000 Actual manufacturing overhead costs $4.830.000 Actual machine hours 180.000 Required: a. Calculate the budget manufacturing overhead rate b.calculate the manufacturing overhead allocated during 2017 c. Calculate the amount of under or overallocated manufacturing overhead. Why do Gammaro's managers need to calcukate 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.
Gammaro company uses normal costing. it allocates
Budget manufacturing overhead costs $4.600.000
Budgeted machine-hours 184.000
Actual manufacturing overhead costs $4.830.000
Actual machine hours 180.000
Required:
a. Calculate the budget manufacturing overhead rate
b.calculate the manufacturing overhead allocated during 2017
c. Calculate the amount of under or overallocated manufacturing overhead. Why do Gammaro's managers need to calcukate this amount?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
