Question

The following cost data relate to the manufacturing activities of Chang Company during the just completed year: $ 15,800 138,000 8,800 78,000 150,600 10,800 $ 402,000 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 $ 408,000 $ 68,000 $ 20,800 $ 30,800 $ 40,800 $ 70,800 The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 20,500 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 Required 1 Required 2 >

Answer 1

1
answer:
it is overapplied overhead cost because applied overhead cost is more than actual overhead cost
applied overhead cost=20500 hours*$20 per hour
=$ 410000
2
CHANG COMPANY
SCHEDULE OF COST OF GOODS MANUFACTURED
Direct material :
Opening rae materials	20800
Add :purchase of raw materials	408000
Total raw materials available	428800
less: closing raw materials	-30800
Raw materials used in production	398000
less:indirect materials	-15800	382200
Direct labors		68000
Manufacturing overhead applied		410000
Total manufacturing costs		844400
Add opening work in progress		40800
		885200
Less: closing work in progress		-70800
Cost of goods manufactured		814400
Explanation:
schedule of cost of goods manufactured prepared on the basis of applied overhead cost and overapplied or underapplied overhead added or less from profit and loss account.