Question

The following cost data relate to the manufacturing activities of Chang Company during the just completed year. Manufacturing overhead costs incurred: Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labor cost Inventories: Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending $ 15,800 138,000 8,800 78,000 150,600 10,800 $ 402,000 $400,000 $ 68,000 $ 20,800 $ 30,800 $ 40,800 $ 70,800 The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 20,500 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a schedule of cost of goods manufactured for the year. Chang Company

Answer 1

Overhead cost 8000 Requirement: 1 Overapplied Explanation: Actual manufacturing overhead costs Manufacturing overhead applied: (20,500 Machine hours * $20 overhead rate) Overapplied overhead cost 402000 410000 8000 Requirement: 2 Chang Company Schedule of cost of Goods Manufactured Direct materials: Raw materials Inventory, beginning Add: Purchase of raw materials Total Raw materials available Less: Raw materials inventory, ending Raw materials used in production Less: Indirect materials Direct labor Manufacturing overhead cost applied to work in process Total manufacturing costs Add: Work in process inventory, beginning 20800 408000 428800 30800 398000 15800 382200 68000 4100001 860200 40800 901000 70800 830200 Less: Work in process inventory, ending Cost of goods manufactured