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.