The following cost data relate to the manufacturing activities of Chang Company during the just completed year:
Actual manufacturing overhead costs incurred:
Indirect materials ................................................................................ $ 15,000
Indirect labor ....................................................................................... 130,000
Property taxes, factory ............................................................................ 8,000
Utilities, factory .....................................................................................70,000
Depreciation, factory ........................................................................... 240,000
Insurance, factory .................................................................................. 10,000
Total actual manufacturing overhead costs incurred ......................... $473,000
Other costs charged to jobs:
Direct materials .................................................................................. $375,000
Direct labor cost ................................................................................... $60,000
Inventories:
Work in process, beginning .................................................................. $40,000
Work in process, ending ....................................................................... $70,000
The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $25 per machine-hour. A total of 19,400 machine-hours was recorded for the year.
Required:
1. Compute the amount of underapplied or overapplied overhead cost for the year.
2. Determine the cost of goods manufactured for the year using the indirect method.