Question

Homework Saved Help Save Exercise 3-7 Applying Overhead; Cost of Goods Manufactured (LO3-3, LO3-4) The following cost data relate to the manufacturing activities of Chang Company during the just completed year $ 16,500 145,000 9.500 85,000 231.700 11,500 $ 499,200 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 $ 415,000 $ 75,000 $ 21,500 $ 31,500 $ 41,500 21.500 The company uses a predetermined overhead rate of $24 per machine hour to apply overhead cost to jobs. A total of 21,200 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.

Answer 1

Solution 1:

Applied overhead = $24* 21200 = $508,800

Overapplied overhead = Applied overhead - Actual overhead = $508800 - $499200 = $9,600

Solution 2:

Chang Company
Schedule of cost of goods manufactured
Direct Material:
Raw Material, Beginning	$21,500
Add: Purchase of Raw Material	$4,15,000
Total Raw material available	$4,36,500
Less: Raw Material, Ending	$31,500
Raw material used in production	$4,05,000
Less: Indirect Material	$16,500	$3,88,500
Direct Labor cost		$75,000
Applied Manufacturing Overhead		$5,08,800
Total Manufacturing Costs		$9,72,300
Add: Work in Process, Beginning		$41,500
Subtotal		$10,13,800
Less: Work in Process, Ending		$71,500
Cost of goods manufactured		$9,42,300