The following cost data relate to the manufacturing activities
of Chang Company during the just completed year:
The company uses a predetermined overhead rate of $26 per
machine-hour to apply overhead cost to jobs. A total of 21,400
machine-hours were used during the year.
Required:
1. Compute the amount of underapplied or overapplied overhead cost for the year.
2. Prepare a schedule of cost of goods manufactured for the year.
| Manufacturing overhead costs incurred: | ||
| Indirect materials | $ | 16,700 |
| Indirect labor | 147,000 | |
| Property taxes, factory | 9,700 | |
| Utilities, factory | 87,000 | |
| Depreciation, factory | 273,900 | |
| Insurance, factory | 11,700 | |
| Total actual manufacturing overhead costs incurred | $ | 546,000 |
| Other costs incurred: | ||
| Purchases of raw materials (both direct and indirect) | $ | 417,000 |
| Direct labor cost | $ | 77,000 |
| Inventories: | ||
| Raw materials, beginning | $ | 21,700 |
| Raw materials, ending | $ | 31,700 |
| Work in process, beginning | $ | 41,700 |
| Work in process, ending | $ | 71,700 |
Required:
1. Compute the amount of underapplied or overapplied overhead cost for the year.
2. Prepare a schedule of cost of goods manufactured for the year.
