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 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 $ 15,700 137,000 8,700 77,089 279,900 10,700 $ 520,000 $ 407,000 $ 67,000 $ 20,700 $ 30,700 $ 40,700 $ 70,700 The company uses a predetermined overhead rate of $26 per machine-hour to apply overhead cost to jobs. A total of 20,400 machine-hours were used during the year.

Answer 1

Requirement 1:

Overhead Over applied = $10,400

Calculations:

Manufacturing Overhead applied= [$26 x 20,400 hours] =$530,400

Overapplied overhead = Manufacturing Overhead applied - Actual Manufacturing Overhead

= $530,400 - $520,000 = $10,400

.

Requirement 2:

Chang Company
Schedule of Cost of Goods Manufactured
Direct Materials:
Beginning inventory	$ 20,700
Purchase of raw materials	$ 407,000
Total raw materials available	$ 427,700
Ending inventory	($ 30,700)
Raw materials used in production	$ 397,000
Indirect materials	($ 15,700)
Direct Materials Used		$ 381,300
Direct Labor		$ 67,000
Manufacturing Overhead Applied		$ 530,400
Total Manufacturing Costs		$ 597,400
Add: Work in process inventory, beginning		$ 40,700
Total cost of Work in Process		$ 638,100
Less: Work in process inventory, ending		($ 53,000)
Cost of goods Manufactured		$ 585,100