Question

The following cost data relate to the manufacturing activities of Chang Company during the just completed year:

Manufacturing overhead costs incurred:
Indirect materials	$	16,400
Indirect labor		144,000
Property taxes, factory		9,400
Utilities, factory		84,000
Depreciation, factory		210,900
Insurance, factory		11,400
Total actual manufacturing overhead costs incurred	$	476,100
Other costs incurred:
Purchases of raw materials (both direct and indirect)	$	414,000
Direct labor cost	$	74,000
Inventories:
Raw materials, beginning	$	21,400
Raw materials, ending	$	31,400
Work in process, beginning	$	41,400
Work in process, ending	$	71,400

The company uses a predetermined overhead rate of $23 per machine-hour to apply overhead cost to jobs. A total of 21,100 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

I hope this clarifies you question. Pls rate and comment in case of any query.