Normal costing, manufacturing overhead. (J. Watson) Trenton Ltd. uses a normal job costing system and applies manufacturing overhead to products on the basis of machine hours. At the beginning of 2009, the company controller budgeted annual overhead at $1,500,000. She also forecast that machine hours would total 48,000. Actual costs were as follows:

Actual machine hours worked during the year were 49,200. Trenton adjusts any underallocated or overallocated overhead to cost of goods sold. The company’s records show that total sales for the year were $2,938,000 and cost of goods sold (before adjustment) equalled $2,260,000.
REQUIRED 5 1. Determine the company’s budgeted overhead rate.
2. Determine the amount of underallocated or overallocated overhead for the year.
3. Compute the company’s cost of goods sold.LO1

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Direct material (DM) used Direct labour Manufacturing overhead (MOII) $ 340,000 $ 875,000 $1,605,000