Question

For 2018, Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead costs are $340,000 and estimated machine hours are 40,000. The actual manufacturing overhead costs are $450,000 and actual machine hours are 50,000. What is the difference between the budgeted and the actual manufacturing overhead using job costing?

Answer 1

Answer:

the difference between the budgeted and the actual manufacturing overhead using job costing is $0.50 per hour

Explanation:

The computation of the  difference between the budgeted and the actual manufacturing overhead using job costing is shown below

The rate based on the actual one

= $450,000 ÷ 50,000

= $9 per hour

The rate based on the standard one

= $340,000 ÷ 40,000

= $8.50 per hour

Now the difference between them is

= $9 - $8.5

= $0.50 per hour

Hence, the difference between the budgeted and the actual manufacturing overhead using job costing is $0.50 per hour