Question

$ 15,000 130,000 8,000 70,000 240,000 10,000 $ 473,000 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 $ 400,000 $ 60,000 $ 20,000 $ 30,000 $ 40,000 $ 70,000 The company uses a predetermined overhead rate of $25 per machine-hour to apply overhead cost to jobs. A total of 19,400 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

answer Part A) Firstly we have to calculate the overheads under applied / (overapplied) = actual overheads - applied overheads = 473000 - (25*19400) = 473000-485000 = $12000 overapplied Thus the correct answer is Overapplied overhead cost is $ 12000 2 Part B) Chang Company Shdedule of costs of goods manufactured 5 Direct Material 5 Beginning raw material inventory 20000 Raw Material Purchases 400000 Total raw material available 420000 Ending raw material inventory 30000 Raw Material used in production 1 3 90000 Indirect material 15000 ! Direct Labour Manufacturing overheads applied (19400*25) Total Manufacturing cost i Beginning work in process T Ending work in process Cost of goods manufactured 375000 60000 485000 920000 40000 960000 70000 890000