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Proration of overhead. The Ride-On-Wave Company (ROW) produces a line of non-motorized boats. ROW uses a normal-costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following data are for 2011:
Budgeted manufacturing overhead cost $125,000
Budgeted direct manufacturing labor cost $250,000
Actual manufacturing overhead cost $117,000
Actual direct manufacturing labor cost $228,000
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