Exercise 4-12 Applying Overhead; Cost of Goods Manufactured [LO4-2, LO4-4, LO4-6]

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

Manufacturing overhead costs:
Property taxes, factory	$	3,000
Utilities, factory		5,000
Indirect labor		10,000
Depreciation, factory		24,000
Insurance, factory		6,000
Total actual manufacturing overhead costs	$	48,000
Other costs incurred:
Purchases of raw materials	$	32,000
Direct labor cost	$	40,000
Inventories:
Raw materials, beginning	$	8,000
Raw materials, ending	$	7,000
Work in process, beginning	$	6,000
Work in process, ending	$	7,500

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 10,000 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.

2.

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

v

Direct materials:
Raw materials available for use	0
Raw materials used in production		$0
Direct labor
Manufacturing overhead cost applied to work in process
Total manufacturing cost		0
Add: Work in process, beginning
Deduct: Work in process, ending
Cost of goods manufactured