Chapter 4-2

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

Manufacturing overhead costs incurred:
Property taxes, factory	$	2,900
Utilities, factory		4,800
Indirect labor		9,800
Depreciation, factory		23,900
Insurance, factory		5,800
Total actual manufacturing overhead costs	$	47,200
Other costs incurred:
Purchases of raw materials	$	31,400
Direct labor cost	$	41,000
Inventories:
Raw materials, beginning	$	8,200
Raw materials, ending	$	6,000
Work in process, beginning	$	5,700
Work in process, ending	$	7,000

The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $5 per machine-hour; a total of 11,600 machine-hours was recorded for the year. All raw materials ultimately become direct materialsnone are classified as indirect materials.

Required:

1. Compute the amount of underapplied or overapplied overhead cost for the year.

overhead cost

2. Prepare a schedule of cost of goods manufactured for the year using the indirect method. (Enter all deductions as a negative.)

Black Company
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials available for use
Raw materials used in production
Total manufacturing cost
Cost of goods manufactured