Begin by selecting the formula you will use. Then, enter the amounts and calculate the rate. Budgeted manufacturing Budgeted manufacturing overhead / Budgeted machine-hours = overhead rate $4,875,000 / 75,000 = $65

Requirement 2. Compute the under- or overallocated manufacturing overhead of Radiator in . Dispose of this amount using the following: a. write-off to Cost of Goods Sold, b. Proration based on the overhead allocated in (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold. Begin by selecting the formula you will use. Next, enter the amounts in the formula and compute the under- or overallocated manufacturing overhead. (Use parentheses or a minus sign when entering overallocated amounts.)

Manufacturing overhead Manufacturing overhead incurred Manufacturing overhead allocated = underallocated (overallocated) $5,125,000 $5,200,000 = $(75,000)

a. Dispose of this amount using a write-off to Cost of Goods Sold. Show the account balances after the write-off. Account Balance After Proration

Cost of Goods Sold

Finished Goods Control .

Work-in-Process Control

Cost of Goods Sold Finished Goods Control Work-in-Process Control Actual Machine-Hours 2012 End-of-Year Balance 60,000 $ 8,500,000 12,000 1,000,000 8,000 500,000