Question

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

(a) The budgeted manufacturing overhead rate is _________ ?
(b) The manufacturing overhead allocated during 2017 is ________ ?

Answer 1

Answer:

budgeted manufacturing overhead rate = $19

manufacturing overhead = $3,724,000

Explanation:

given data

Budget overhead cost =  $3,800,000

Budget machine hours = 200,000

actual overhead cost =  $3,660,000

actual machine hours = 196,000

solution

we get here budgeted manufacturing overhead rate that is express as

budgeted manufacturing overhead rate = Budgeted manufacturing overhead costs ÷  Budgeted machine hours  .....................1

put here value and we get

budgeted manufacturing overhead rate = $\frac{3800000}{200000}$

budgeted manufacturing overhead rate = $19

and

now we get here manufacturing overhead allocated  that is express as

manufacturing overhead = actual machine hours × budget manufacturing overhead rate    ...................2

put here value we get

manufacturing overhead =  196,000 × $19

manufacturing overhead = $3,724,000