1. (6 points) The following cost data relate to the manufacturing activities of

Question

1. (6 points) The following cost data relate to the manufacturing activities of Newberry Company during the just completed year: The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The predetermined overhead rate for the year was $15 per machine-hour. A total of 23,000 machine-hours were recorded for the year. Required: a. Compute the amount of under-applied or over- applied manufacturing overhead cost for the year. b. Prepare a Schedule of Cost of Goods Manufactured for the year. (Show ALL supporting work and computations for the above.)

Explanation / Answer

Actual Overheads 353000-15000 338000 Predetermined overhead rate 23000*15 345000 Underapplied Overheads=345000-338000 7000 Underapplied overheads is $ 7000

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