Exercise 3-7 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	$	16,700
Indirect labor		147,000
Property taxes, factory		9,700
Utilities, factory		87,000
Depreciation, factory		273,900
Insurance, factory		11,700
Total actual manufacturing overhead costs incurred	$	546,000
Other costs incurred:
Purchases of raw materials (both direct and indirect)	$	417,000
Direct labor cost	$	77,000
Inventories:
Raw materials, beginning	$	21,700
Raw materials, ending	$	31,700
Work in process, beginning	$	41,700
Work in process, ending	$	71,700

The company uses a predetermined overhead rate of $26 per machine-hour to apply overhead cost to jobs. A total of 21,400 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.