Chapter 4, Problem 4.24E

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. 1. Calculate the budgeted manufacturing overhead rate.

Required

1. 2. Calculate the manufacturing overhead allocated during 2017.
2. 3. Calculate the amount of under- or overallocated manufacturing overhead. Why do Taylor’s managers need to calculate this amount?