Question
The following cost data relate to the manufacturing activities of Chang Company during the just completed year: Manufacturing overhead costs incurred:Indirect materials$15,800Indirect labor138,000Property taxes, factory8,800Utilities,
The following cost data relate to the manufacturing activities of Chang Company during the just completed year:
Manufacturing overhead costs incurred:Indirect materials$15,800Indirect labor138,000Property taxes, factory8,800Utilities, factory78,000Depreciation, factory150,600Insurance, factory10,800Total actual manufacturing overhead costs incurred$402,000Other costs incurred:Purchases of raw materials (both direct and indirect)$408,000Direct labor cost$68,000Inventories:Raw materials, beginning$20,800Raw materials, ending$30,800Work in process, beginning$40,800Work in process, ending$70,800
The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 20,500 machine-hours were used during the year.
Required:
1. Compute the amount of underapplied or overapplied overhead cost for the year.
2. Prepare schedule of cost of goods manufactured for the year.
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