Question

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 $ 15,200 132,000 8,200 72,000 152,400 10,200 $390,000 Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred Other costs incurred: $ 402,000 $ 62,000 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 $ 20,200 $ 30,200 $ 40,200 $ 70,200 The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 19,900 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 Compute the amount of underapplied or overapplied overhead cost for the year. overhead cost

Answer 1

Answer: b) calculation of the amount of ander applied or over applied :- Amount of ander applied or over applied = Adual manufacturing Overhead costs - Manufacturing overhead cost applied. Manufacturing overhead cost applied - Tolal Machine hours x overhead yote maclive peshout =19900 hours x $20 per hour = $398,000 .: Manufacturing overhead cast applied is $398000 Amount of cender applied Cor) Overopplied = = $390,000 - $398.000 = ($8,000) : Manufacturing lesing, amount of ander applied (ov) over applied is $8,000) q) calculation of cost of goods manufactured for Amount Add the year. particulars Amount Raw Materials opening balance $20.900 Add: purchase of Raw materials $402,000 Total Raco materials quailable $422.,200 Less! Raw materials closing balauce $30,200 Raw matesials used in production $392,000 Less. In direct materiala . $ 15,200 $376,800 Direct Labor $ 62,000 Manufacturing overhovede $398,000 Total manufacturing cost , Work in process $836,800 Add opening Inventory work in process $ 40,200 Less! closing Inventory work in process $70,200 $ 806,800 Cost of goods Mauafactured . The cost of goods Manufactured for the year is $ 806,800.