Question
The following cost data relate to the manufacturing activities of Black Company during the just-completed year: Manufacturing overhead costs: Property taxes, factory $ 4,400 Utilities,
The following cost data relate to the manufacturing activities of Black Company during the just-completed year:
Manufacturing overhead costs: | |||
Property taxes, factory | $ | 4,400 | |
Utilities, factory | 7,100 | ||
Indirect labour | 12,800 | ||
Depreciation, factory | 27,500 | ||
Insurance, factory | 8,800 | ||
Total actual manufacturing overhead costs | $ | 60,600 | |
Other costs incurred: | |||
Purchases of raw materials. | $ | 39,000 | |
Direct labour cost | $ | 49,800 | |
Inventories: | |||
Raw materials, beginning | $ | 10,800 | |
Raw materials, ending | $ | 8,400 | |
Work in process, beginning | $ | 8,100 | |
Work in process, ending | $ | 10,300 | |
The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $6 per machine-hour; a total of 11,000 machine-hours were 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.
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