Reference no: EM132998453

The following cost data relate to the manufacturing activities of the Kanaba Corporation last year:

Manufacturing overhead costs:

Property taxes  $1,500

Utilities, factory  2,500

Indirect labor  5,000

Depreciation, factory  12,000

Insurance, factory  3,000

Total  $24,000

Other costs incurred:

Purchases of direct materials  $16,000

Direct labor cost  $20,000

Inventories:

Direct materials, January 1  $4,000

Direct materials, December 31  $3,500

Work in process, January 1  $3,000

Work in process, December 31  $3,750

The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The rate last year was $5.00 per machine-hour; a total of 5,000 machine-hours were recorded for the year.

Required:

Problem a. Calculate the amount of applied overhead

Problem b. Compute the amount and specify underapplied or overapplied overhead cost for the year.

Problem c. Prepare a schedule of Cost of Goods Manufactured for the year. Show all items.