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of ion A company has decided to use Machine Hours (MHs) as the most appropriate cost driver to allocate overheads (OHDs) in their small manufacturing
of ion A company has decided to use Machine Hours (MHs) as the most appropriate cost driver to allocate overheads (OHDs) in their small manufacturing company. At the beginning of the year, the company set a predetermined overhead rate (POHR) for each Machine Hour used on jobs during the period. Using the following information, calculate the Predetermined Overhead Rate, calculate the amount of overhead applied, compare this to the actual overhead and indicate whether amount of adjustment required to be made to the Cost of Goods Sold (COGS) Account to eliminate any over or under applied overhead for the period. Budgeted Annual OHDS $793,152 Budgeted Annual Cost Driver Activity Level 10368 MH Actual Activity Level 11200 MH Actual OHDS $839,664 Actual Activity Level 11200 MH Actual OHDS $839,664 Required: Enter the amount to be applied to the COGS Account PLUS show whether this should be Debited (DR) or Credited (CR) by that amount. NOTE: Your answer must ONLY include the amount (as a positive number) and either DR or CR. e.g. If you decide to Credit the COGS Account by $1,000 then ONLY enter 1000 CR (Note the DR or CR should be in CAPITAL LETTERS and AFTER the number and you do NOT enter "UNDER" or "OVER
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