Question

The following cost data relate to the manufacturing activities of Chang Company during the just completed year: $ 16,300 143,000 9,300 83,000 149,100 11,300 $412,000 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 $ 413,000 $ 73,000 $ 21,300 $ 31,300 $ 41.300 $ 71.300 The company uses a predetermined overhead rate of $20 per machine hour to apply overhead cost to jobs. A total of 21,000 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 < Prev 3 of 3 Next >

Answer 1

Requirement 1:

Actual Manufacturing Overheads = $412,000

Applied Overheads = 21,000 machine hours @ $20 per machine hour

= $420,000

Over applied overheads = Applied Overheads - Actual Overheads

= $420,000 - $412,000

= $8,000

Requirement 2:

SCHEDULE OF GOODS MANUFACTURED Direct Materials Beginning Raw Material Inventory $ 21,300.00 Add: Cost of raw material purchased $ 3,96,700.00 Total raw material available $ 4,18,000.00 Less: Ending Raw material Inventory | $ 31,300.00 Total Raw material used Direct Labor Applied Overhead Cost Total manufacturing costs Add: Beginning Work in progress $3,86,700.00 $ 73,000.00 $ 4,20,000.00 $ 8,79,700.00 $ 41,300.00 $9,21,000.00 $ 71,300.00 $ 8,49,700.00 Less: Closing work in progress Cost of goods manufactured

Notes:

1. Be careful while reading figures (with commas)
2. Indirect material is deducted from raw material purchases.