Consider the following selected cost data for Schwarzmetal GmbH for 2007.
Budgeted manufacturing overhead........................ €7000000
Budgeted machine-hours................................... 200000
Actual manufacturing overhead........................... €6800000
Actual machine-hours....................................... 195000
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 over allocation 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 over allocation of manufacturing overhead. Is the amount significant? Journalise the disposition of this amount on the basis of the closing balances in the relevant accounts.