Question

ine TOIIOWI ng cost aata relate to tne manuracturing activities cna ng company auring tne Just COmpletea year Manufacturing overhead costs incurred: Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred s 15,300 133,000 8,300 73,000 152,100 10,300 $392,000 Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labor cost $403,000 $63,000 Inventories: Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending 20,300 $30,300 s 40,300 $70,300 The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 20,000 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 1Required 2 Compute the amount of underapplied or overapplied overhead cost for the year overhead cost

Answer 1

Answers

* All working forms part of the answer

Requirement 1

Answer: Over-applied Overhead Cost = $ 8,000

A	Total actual machine hours	20,000
B	Predetermined Overhead rate per machine hour	$ 20
C = A/B	Applied Overhead	$400,000
D	Actual manufacturing overhead	$392,000
	Overheads are	OVER - APPLIED, because applied overheads are MORE than actual overhead
E = C - D	OVER - APPLIED by	$8,000

Requirement 2

Direct materials:
Beginning raw material inventory	$20,300
Add: Purchase of raw material	$403,000
Total raw materials available	$423,300
Less: Ending raw material inventory	$30,300
Raw material used in production	$393,000
Less: Indirect materials	$15,300	$377,700
Direct labor cost		$63,000
Manufacturing Overhead applied		$400,000
Total manufacturing costs		$840,700
Add: Beginning WIP Inventory		$40,300
Total cost of Work in Process		$881,000
Less: Ending WIP Inventory		$70,300
Cost of Goods manufactured		$810,700