Question

Need help with question 2 ....

The company uses a predetermined overhead rate of $27 per machine-hour to apply overhead cost to jobs. A total of 21,500 machine-hours were used during the year.

ework Problems 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 s 16,800 148,000 9,800 88,000 295,300 11,800 $569,700 Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labcost $418,000 s 78,000 Inventories: Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending s 21,800 s 31,800 41,800 $ 71,800 The company uses a predetermined overhead rate of $27 per machine-hour to apply overhead cost to jobs. A tot 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 :-

2 ) :-

Description	Amount	Amount
Raw materials Opening balance	$21,800
Purchase of raw materials	$418,000
Total raw materials available	= $21,800 + $418,000 = $439,800
Raw materials closing balance	$31,800
Raw materials used in production	= $439,800 - $31,800 = $408,000
Indirect materials	$16,800	= $408,000 - $16,800 = $391,200
Direct labor		$78,000
Manufacturing overhead cost applied to work in process		= $27 * 21,500 machine hours = $580,500
Total manufacturing cost		= $391,200 + $78,000 + $580,500 = $1,049,700
Opening work in process inventory		$41,800
Closing work in process inventory		$71,800
Cost of Goods manufactured		= $1,049,700 + 41,800 - $71,800 = $1,091,500 - $71,800 = $1,019,700