Dear Sirs,

I have total manufacturing overhead of usd 500,000. I use machine hour for the manufacturing over head allocation to the products. I have 2,400 machine hour capacity. But according to my budget my products need only 1,500 machine ours.

My question is that what is the denominator to divide the total manufacturing over head? Is it 2,400 machine hour total machine capacity or the exact machine hours needs to produce 1,500 machine hours?

Please, I need urgent answer.

Regards,
Teramaje