Consider the following selected cost data for Schwarzmetal GmbH for 2023.

Schwarzmetal’s job-costing system has a single manufacturing overhead cost pool (allocated using a budgeted rate based on actual machine-hours). Any amount of under- or overallocation is immediately written off to Cost of Goods Sold.
Required 1 Calculate the budgeted manufacturing overhead rate.
2 Journalise the allocation of manufacturing overhead.
3 Calculate the amount of under- or overallocation of manufacturing overhead. Is the amount significant? Journalise the disposition of this amount on the basis of the closing balances in the relevant accounts.

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Budgeted manufacturing overhead Budgeted machine-hours Actual manufacturing overhead Actual machine-hours 7 000 000 200 000 6 800 000 195 000