The Zero Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2020:

1.

Compute the budgeted manufacturing overhead rate for 2020.

2.

Compute the under- or overallocated manufacturing overhead of Zero Radiator in 2020. Adjust for this amount using the following:

a.

Write-off to Cost of Goods Sold

b.

Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold

c.

Proration based on the overhead allocated in 2020 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold

.

3. Which method do you prefer in requirement 2? Explain.

Budgeted manufacturing overhead costs	$5,850,000
Overhead allocation base	Machine-hours
Budgeted machine-hours	90,000
Manufacturing overhead costs incurred	$6,050,000
Actual machine-hours	85,000

Machine-hours data and the ending balances (before proration of under- or overallocated overhead) are as follows:

	Actual Machine-Hours	2020 End-of-Year Balance
Cost of Goods Sold	68,000	$8,800,000
Finished Goods Control	10,000	1,650,000
Work-in-Process Control	7,000	550,000

After Proration

Cost of Goods Sold ___________________

Finished Goods Control_______________

Work-in-Process Control ________________