P19-33B Regal Company produces hospital uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Regal reports the following cost data for 2009:
Accounting for manufacturing overhead
Budget
Actual
Machine hours
7,000 hours
6,500 hours
Indirect materials
50,000
52,000
Depreciation on trucks used to deliver uniforms to customers
14,000
12,000
Depreciation on plant and equipment
65,000
67,000
Indirect manufacturing labor
40,000
43,000
Customer service hotline
19,000
21,000
Plant utilities
27,000
20,000
Requirements
1. Compute the predetermined manufacturing overhead rate. (p. 955)
2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account. (pp. 957–958)
3. Close the under- or overallocated overhead to Cost of Goods Sold. (pp. 958–959)
4. How can managers use accounting information to help control manufacturing overhead costs? (pp. 955–956)
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