Compute amount of underapplied or overapplied overhead cost

Reference no: EM13839976

Question 1: Prepare a schedule of cost of goods manufactured for the year.

Change Company

Schedule of cost of goods manufactured

Direct materials:
Raw materials inventory, beginning
Add: Purchases of raw materials
Raw materials available tor use	0
Less: Raw materials inventory, ending
Raw materials used in production	0
Less: Indirect materials		$0
Manufacturing overhead cost applied to work in process
Direct labor		0
Total manufacturing costs
Add: Work in process inventory, beginning		0

Less: Work in process inventory, ending
Cost of goods manufactured		$0

Question 2: The following cost data relate to the manufacturing activities Chang Company during the just completed year

The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $20 per machine-hour. A total of 21,700 machine-hours was recorded for the year.

Manufacturing overhead costs incurred:
Indirect materials	$17,000
Indirect labor	150,000
Property taxes, factory	10,000
Utilities, factory	90,000
Depreciation, factory	147,000
Insurance, factory	12,000
Total actual manufacturing overhead costs incurred	$426,000

Other costs incurred:
Purchases of raw materials (both direct and indirect)	$420,000
Direct labor cost	$80,000
Inventories:
Raw materials, beginning	$22,000
Raw materials, ending	$32,000
Work in process, beginning	$42,000
Work in process, ending	$72,000

Required:

1. Compute the amount of under applied or over applied overhead cost for the year.

Reference no: EM13839976

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