INTRODUCTION e.edu
9-5: The Santa Cruz Machine Shop allocates overhead based on machine hours, using a budgeted overhead rate. The budgeted overhead rate is calculated using an estimate of 6,000 machine hours in the denominator, and $60,000 in the numerator. Actual overhead was $500 less than budgeted. Actual machine hours were 1,500 more than budgeted. ................
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