Manufacturing overhead costs incurred Indirect materials Indirect labor Property

Question

Manufacturing overhead costs incurred Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory S 16,500 145,000 9,500 85,000 231,700 11,500 Total actual manufacturing overhead costs incurred $499,200 Other costs incurred Purchases of raw materials (both direct and indirect) 415,000 Direct labor cost 75,000 Inventories Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending S 21,500 $ 31,500 $ 41,500 $ 71,500 The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $24 per machine-hour. A total of 21,200 machine-hours was recorded for the year Required 1. Compute the amount of underapplied or overapplied overhead cost for the year overhead cost 2. Prepare a schedule of cost of goods manufactured for the year, Chang Company Schedule of Cost of Goods Manufactured Direct materials Raw materials available for use Raw materials used in production Total manufacturing costs Cost of goods manufactured

Explanation / Answer

Under/(over) Applied overhead = Applied overhead-actual overhead

= (21200*24)-499200

(Over) applied overhead = 9600

2) Schedule of cost of goods manufactured :

Beginning raw material 21500 Raw material purchase 415000 Raw material available for use 436500 Ending raw material (31500) Raw material used in production 405000 Less: Indirect material (16500) Direct material used 388500 Direct labour 75000 Manufacturing overhead (21200*24) 508800 Total manufacturing cost 972300 Beginning work in process 41500 Total cost of work in process 1013800 Less; Ending work in process (71500) Cost of goods manufactured 942300

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