Question

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The following cost data relate to the manufacturing activities of Chang Company during the just completed year. $ 15,400 134,000 8,480 74,000 191,200 10,400 $ 433,400 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 $ 404,000 $ 64,000 $ 20,400 $ 30,400 $ 40,400 $ 70,400 The company uses a predetermined overhead rate of $22 per machine-hour to apply overhead cost to jobs. A total of 20,100 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.

Answer 1

1) Applied overhead = 20100*22 = 442200

Actual overhead = 433400

Over applied overhead cost 8800

2) Schedule of cost of goods manufactured

Direct material used
Beginning raw material	20400
Raw material purchase	404000
Raw material available for use	424400
Less; Ending raw material	-30400
Raw material used	394000
Less: Indirect material	-15400
Direct material used		378600
Direct labor		64000
Manufacturing overhead applied		442200
Total manufacturing cost		884800
Beginning work in process		40400
Total Cost of work in process		925200
Less: Ending work in process		-70400
Cost of goods manufactured		854800