Clara Corporation manufactures custom cabinets for kitchens. It uses a normal$-$costing system with two direct cost categories$-$direct materials and direct manufacturing labor$-$and one indirect$-$cost pool, manufacturing overhead costs.

View the manufacturing overhead costs information for $2020.$

View the other information available as of December $31,2020.$

Requirement

Calculate the underallocated or overallocated manufacturing overhead at the end of $2020$ and prorate it to Work$-$in$-$Process Control, Finished Goods Control, and Cost of Goods Sold accounts based on the allocated manufacturing overhead in each account balance using normal costing.

Begin by calculating the budgeted indirect cost rate. Identify the formula and then calculate the rate. $($Assume the cost allocation base is direct labor hours.$)$

Manufacturing Overhead Costs

Budgeted manufacturing overhead costs

$

$1,190,000$

Budgeted direct manufacturing labor hours

$34,000$ hours

Actual manufacturing overhead costs

$$,936,000$

Actual direct manufacturing labor$-$hours

$26,000$ hours