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: Manufacturing overhead costs incurred: Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred 16,500 145,000 9,500 85,000 231,700 11,500 $499,200 Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labor cost $415,000 $ 75,000 Inventories: Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending 21,500 31,500 $41,500 71,500 The company uses a predetermined overhead rate of $24 per machine-hour to apply overhead cost to jobs. A total of 21,200 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 Complete this question by entering your answers in the tabs below Required 1Required 2 Prepare a schedule of cost of goods manufactured for the year. Chang Company Schedule of Cost of Goods Manufactured

Explanation / Answer

1.. Manufacturing Overhead applied to Production = Predetermined Overhead Rate * Actual machine Hours =24*21200 $508,800 Overapplied Manufacturing Overhead [$508,800-$499,200] $9,600 2. Schedule of Cost of Goods Manufactured Paticulars Amount Raw Materials ,beginning $21,500 Add : Purchases $415,000 Raw Material for Use $436,500 Less: Raw Materials, ending $31,500 Less : Indirect Materials $16,500 Direct materials used $388,500 Add: Direct Labour Cost $75,000 Add: Manufacturing Overhead Applied to Production $508,800 Total Manufacturing Cost $972,300 Add : Work in Progress , Beginning $41,500 Less : Work in Progress , ending $71,500 Cost of Goods Manufactured $942,300

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