Manchester Automobiles Inc. has the following budgeted overhead cost and other data for its assembly department for the month of June 2020: 

Compute the budgeted factory overhead rate, actual machine hours, and indicate how the difference between actual overhead cost incurred and applied overhead would be treated on Manchester’s income statement for the month of June 2020.

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Budgeted Data: Indirect materials Factory rent Supervision Depreciation on equipment Cost-allocation base for overhead application Total budgeted machine-hours Other Data: Total applied overhead costs for June 2020 Actual overhead cost incurred during June 2020 £ 85,000 £ 26,000 £ 33,500 £108,000 Machine hours 25,000 £308,050 £288,500