Question: Trenton Ltd uses a normal job costing system and applies manufacturing

Trenton Ltd. uses a normal job-costing system and applies manufacturing overhead to products on the basis of machine hours. At the beginning of 2012, the company controller budgeted annual overhead at $1,500,000. She also forecast that machine hours would total 48,000. Actual costs were as follows:
Direct material (DM) used ........ $ 340,000
Direct labour .............. $ 875,000
Manufacturing overhead (MOH) ... $1,605,000
Actual machine hours worked during the year were 49,200. Trenton adjusts any under-allocated or over-allocated overhead to cost of goods sold. The company’s records show that total sales for the year were $2,938,000 and cost of goods sold (before adjustment) equaled $2,260,000.
1. Determine the company’s budgeted overhead rate.
2. Determine the amount of under-allocated or over-allocated overhead for the year.
3. Compute the company’s cost of goods sold.

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  • CreatedJuly 31, 2015
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