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Exercise 3-7 (Algo) Applying Overhead; Cost of Goods Manufactured [LO3-3, LO3-4] The following cost data relate to the manufacturing activities of Chang Company during the
Exercise 3-7 (Algo) Applying Overhead; Cost of Goods Manufactured [LO3-3, LO3-4]
The following cost data relate to the manufacturing activities of Chang Company during the just completed year:
Manufacturing overhead costs incurred: | |
---|---|
Indirect materials | $ 16,200 |
Indirect labor | 142,000 |
Property taxes, factory | 9,200 |
Utilities, factory | 82,000 |
Depreciation, factory | 169,900 |
Insurance, factory | 11,200 |
Total actual manufacturing overhead costs incurred | $ 430,500 |
Other costs incurred: | |
Purchases of raw materials (both direct and indirect) | $ 412,000 |
Direct labor cost | $ 72,000 |
Inventories: | |
Raw materials, beginning | $ 21,200 |
Raw materials, ending | $ 31,200 |
Work in process, beginning | $ 41,200 |
Work in process, ending | $ 71,200 |
The company uses a predetermined overhead rate of $21 per machine-hour to apply overhead cost to jobs. A total of 20,900 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.
Prepare a schedule of cost of goods manufactured for the year. Chang Company Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production Direct materials used in production $ 0 0 Total manufacturing costs added to production Total manufacturing costs to account for 0 Cost of goods manufactured
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