Solar Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base

Subject:AccountingPrice: Bought3

Share With

Solar Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2012:

Budgeted manufacturing overhead costs $4,875,000

Overhead allocation base Machine hours Budgeted machine-hours 75,000 Manufacturing overhead costs incurred $5,125,000 Actual machine-hours 80,000 Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows Actual Machine-Hours 2012 End-of-Year Balance Cost of Goods Sold 60,000 $8,500,000 Finished Goods Control 12,000 1,000,000 Work-in-Process Control 8,000 500,000 Requirement 1. Compute the budgeted manufacturing overhead rate for 20122012. Begin by selecting the formula you will use. Then, enter the amounts and calculate the rate. Budgeted manufacturing / = overhead rate Compute the budgeted manufacturing overhead rate for 2012 2. Compute the under- or overallocated manufacturing overhead of Solar Radiator in 2012 Dispose of this amount using the following: a. Write-off to Cost of Goods Sold b. Proration based on the overhead allocated in 2012 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold 3. Which method do you prefer in requirement 2? Explain. this is the table

Budgeted manufacturing overhead costs	$4,875,000
Overhead allocation base	Machine-hours
Budgeted machine-hours	75,000
Manufacturing overhead costs incurred	$5,125,000
Actual machine-hours   Actual Machine-Hours 2012 End-of-Year Balance Cost of Goods Sold 60,000 $8,500,000 Finished Goods Control 12,000 1,000,000 Work-in-Process Control 8,000 500,000	80,000