The following cost data relate to the manufacturing activities of Chang Company

Question

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

The company uses a predetermined overhead rate of $24 per machine-hour to apply overhead cost to jobs. A total of 20,200 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.

Prepare a schedule of cost of goods manufactured for the year.

    Manufacturing overhead costs incurred: Indirect materials $ 15,500 Indirect labor 135,000 Property taxes, factory 8,500 Utilities, factory 75,000 Depreciation, factory 230,700 Insurance, factory 10,500 Total actual manufacturing overhead costs incurred $ 475,200 Other costs incurred: Purchases of raw materials (both direct and indirect) $ 405,000 Direct labor cost $ 65,000 Inventories: Raw materials, beginning $ 20,500 Raw materials, ending $ 30,500 Work in process, beginning $ 40,500 Work in process, ending $ 70,500

Explanation / Answer

Actual manufacturing overhead costs incurred = 475,200

Manufacturing overhead applied = 20,200 machine hours * 24 per machine hour = 484,800

Overapplied overhead cost = 484,800 - 475,200 = 9,600

-------------------------------------------------------

2.

Chang Company

Schedule of Cost of Goods Manufactured

Direct materials : Beginning raw materials 20,500 Add : Raw materials purchased 405,000 Total raw materials available 425,500 Less : Ending raw materials 30,500 Raw materials used in production 395,000 Less : Indirect materials 15,500 Direct labour 379,500 Manufacturing overhead cost applied 484,800 Total manufacturing costs 864,300 Add : Beginning work in process 40,500 Work in process available 904,800 Less : Ending work in process 70,500 Cost of goods manufactured 834,300

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.