The following cost data relate to the manufacturing activities of Black Company

Question

The following cost data relate to the manufacturing activities of Black Company during the just completed year: Manufacturing overhead costs: Property taxes, factory $ 2,900 Utilities, factory 4,900 Indirect labor 10,000 Depreciation, factory 23,900 Insurance, factory 6,000 Total actual manufacturing overhead costs $ 47,700 Other costs incurred: Purchases of raw materials $ 32,500 Direct labor cost $ 40,000 Inventories: Raw materials, beginning $ 8,400 Raw materials, ending $ 6,600 Work in process, beginning $ 5,100 Work in process, ending $ 6,700 The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $5 per machine-hour; a total of 11,100 machine-hours was recorded for the year. All raw materials ultimately become direct materials

Explanation / Answer

Factory Taxes

2900

Utilities

4900

Indirect Labour

10000

Depreciation

23900

Insurance

6000

Total

47700

Actual

Purchase of RM

32500

Opening RM

8400

Closing RM

-6600

RM Consumed

34300

Direct Labour

40000

Opening WIP

5100

Closing WIP

-6700

OH Cost applied

55500

11100*5

Overapplied OH

-7800

(47700-55500)

TOTAL

120400

Overapplication of OH = 7800

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Factory Taxes

2900

Utilities

4900

Indirect Labour

10000

Depreciation

23900

Insurance

6000

Total

47700

Actual

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