Problem - Regal Company produces hospital uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Regal reports the following cost data for 2009:

                                                                                            Budget                   Actual

Machine hours                                                                        7,000 hours           6,500 hours

Indirect materials                                                                   50,000                   52,000

Depreciation on trucks used to deliver uniforms to customers     14,000                   12,000

Depreciation on plant and equipment                                        65,000                   67,000

Indirect manufacturing labor                                                    40,000                   43,000

Customer service hotline                                                         19,000                   21,000

Plant utilities                                                                           27,000                   20,000

1. Compute the predetermined manufacturing overhead rate.

2. Post actual and allocated manufacturing overhead to the Manufacturing Overhead T-account.

3. Close the under- or overallocated overhead to Cost of Goods Sold.

4. How can managers use accounting information to help control manufacturing overhead costs?