3 The Hauty 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 2017 Click the icon to view the following data) Read the requirements Requirement 1. Compute the budgeted manufacturing overhead rate for 2017 Begin by selecting the formula you will use. Then, enter the amounts and calculate the rate Budgeted manufacturing overhead rate (1) (2) - Requirement 2. Compute the under or overallocated manufacturing overhead of Hary Radiator in 2017 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 - underallocated (overallocated) 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 b. Dispose of the amount using a proration based on ending balances (before proration) in Work in Process Control Finished Goods Control and Cost of Goods Sold. Begin by selecting the formula to calculate the adjustment to each account. Then enter the amounts in the formula (Enter the proportions as a decimal to three decimal places. "XXX". Use a minus sign or parentheses to show overallocated amounts and adjustments to be subtracted) Adjustment COGS WP Now enter the account balances after the write-off. Account Balance After Proration Cost of Goods Sold Finished Goods Control Work-in-Process Control c. Dispose of the amount using a proration based on the overhead allocated in 2017 (before proration) in the ending balances of Work-in-Process Control Finished Goods Control and cost of Goods Sold. Begin by selecting the formula to calculate the adjustment to each account. Then enter the amounts in the formula (Enter the proportions as a decimal to three decimal places, "X XX. Use a minus sign or parentheses to show overallocated amounts and adjustments to be subtracted) Adjustment COGS x FG WIP Now enter the account balances after the write-off Account Balance After Proration Cost of Goods Sold Finished Goods Control Work in Process Control Requirement 3. Which method do you prefer in requirement 2? Explain. Alternative (9) is theoretically preferred over (10) This alternative yields the same ending balances in work in process, finished goods, and cost of goods sold that would have been reported (11) 1: Data Table Budgeted manufacturing overhead costs $ 4,800,000 Overhead allocation base Machine-hours Budgeted machine-hours 80,000 Manufacturing overhead costs incurred $ 4,950,000 Actual machine-hours 75,000 Machine-hours data and the ending balances (before proration of under-or overallocated overhead) are as follows: Actual Machine Hours 2017 End-of-Year Balance Cost of Goods Sold 60,000 8,000,000 Finished Goods Control 11,000 1,250,000 Work-in-Process Control 4,000 750,000 2: Requirements 1. Compute the budgeted manufacturing overhead rate for 2017. 2. Compute the under-or overallocated manufacturing overhead of Hazy Radiator in 2017. Dispose of this amount using 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 of Goods Sold c. Proration based on the overhead allocated in 2017 (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. (1) O Actual cost of goods sold O Actual machine-hours O Actual manufacturing overhead O Budgeted cost of goods sold O Budgeted machine-hours O Budgeted manufacturing overhead (2) O Actual cost of goods sold Actual machine-hours Actual manufacturing overhead O Budgeted cost of goods sold O Budgeted machine-hours O Budgeted manufacturing overhead (4) (3) O Manufacturing overhead allocated Manufacturing overhead budgeted Manufacturing overhead incurred O O Manufacturing overhead allocated O Manufacturing overhead budgeted O Manufacturing overhead incurred Proportion (decimal) O (Over-) Underallocated OH O Adjustment Allocation rate O Ending Balance (6) O O Allocation rate O Beginning Balance Ending Balance (7) O Proportion (decimal) O (Over-) Underallocated OH O Adjustment O Allocation rate O Ending Balance (8) O O Allocation rate O Beginning Balance O Ending Balance (9) O (a) O (b) (10) O (a) and (b) O (a) and (c) (b) and (c) (11) O had actual indirect cost rates been used had budgeted indirect cost rates been used O had the over- understatement occurred in only the goods sold