Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 | $ 16,000 |
Indirect labor | 140,000 |
Property taxes, factory | 9,000 |
Utilities, factory | 80,000 |
Depreciation, factory | 251,500 |
Insurance, factory | 11,000 |
Total actual manufacturing overhead costs incurred | $ 507,500 |
Other costs incurred: | |
Purchases of raw materials (both direct and indirect) | $ 410,000 |
Direct labor cost | $ 70,000 |
Inventories: | |
Raw materials, beginning | $ 21,000 |
Raw materials, ending | $ 31,000 |
Work in process, beginning | $ 41,000 |
Work in process, ending | $ 71,000 |
The company uses a predetermined overhead rate of $25 per machine-hour to apply overhead cost to jobs. A total of 20,700 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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started