Question

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: points eBook $ 16,900 149,000 9,900 89,000 316,900 11,900 $ 593,600 Print 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 $ 419,000 $ 79,000 References $ 21,900 $ 31,900 $ 41,900 $ 71,900 The company uses a predetermined overhead rate of $28 per machine-hour to apply overhead cost to jobs. A total of 21,600 machi 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 Compute the amount of underapplied or overapplied overhead cost for the year. overhead cost Required 1 Required 2 >

Answer 1

Requirement 1

Overheads Overapplied

$ 11,200

Requirement 2

CHANG COMPANY
Cost of Goods manufactured
Direct Material
Raw material Inventory Beginning	$ 21,900
Raw material Purchased	$ 402,100
Raw material available for use	$ 424,000
Less: Raw material Inventory Ending	$ 31,900
Direct Material Used		$ 392,100
Direct labor		$ 79,000
Manufacturing Overheads applied		$ 604,800
Total manufacturing Cost		$ 1,075,900
Add: Beginning Work in Progress		$ 41,900
Total Cost of Work in Progress		$ 1,117,800
Less: Ending Work in progress		$ 71,900
Cost of Goods Manufactured		$ 1,045,900

Working

Overheads applied (28 x 21600)	$ 604,800
Actual overheads	$ 593,600
Overheads Overapplied	$ 11,200