Question

Brockton Corporation, which allocates manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.

Actual manufacturing overhead costs incurred $35,000
Manufacturing overhead allocated to jobs 33,800
Underallocated or overallocated Manufacturing overhead ?

Required:
Calculate the manufacturing overhead and indicate if the remainder is underallocated or overallocated for the year.

Answer 1

Underapplied overhead= $1,200

Step-by-step explanation:

Giving the following information:

Actual manufacturing overhead costs incurred $35,000

Manufacturing overhead allocated to jobs 33,800

To calculate the under/over allocation, we need to use the following formula:

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 35,000 - 33,800

Underapplied overhead= $1,200