Question

The following cost data relate to the manufacturing activities of Chang Company during the just completed year 0:38:08 Manufacturing overhead contas 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 $ 15,600 136,000 8,600 76,000 250,700 10,600 $497,500 ook $406,000 $ 66,000 $ 20,600 $ 30,600 $ 40,600 $ 70,600 int rences The company uses a predetermined overhead rate of $25 per machine-hour to apply overhead cost to jobs. A total of 20,300 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. Loverhead cost Prev 2 of 5 !!! Score answer

Answer 1

(1)

Overapplied

overhead cost

$ 10,000

(2)

Direct materials:
Raw materials inventory, beginning	$    20,600
Add: Purchases of Raw materials	$ 406,000
Raw materials available for use	$ 426,600
Less: Raw materials inventory, ending	$    30,600
Raw materials used in production	$ 396,000
Less: Indirect materials	$    15,600	$ 380,400
Direct labor		$    66,000
Manufacturing overhead cost applied to work in process		$ 507,500
Total manufacturing costs		$ 953,900
Add: Work in process inventory, beginning		$    40,600
		$ 994,500
Less: Work in process inventory, ending		$    70,600
Cost of goods manufactured		$ 923,900

Explanations :-

Overhead applied =  20300 * $25 = $507500

Overapplied overapplied = $507500 - $497500 = $10000