Question 1: Prepare a schedule of cost of goods manufactured for the year.
Change Company
Schedule of cost of goods manufactured
| Direct materials: |
|
|
| Raw materials inventory, beginning |
|
|
| Add: Purchases of raw materials |
|
|
| Raw materials available tor use |
0 |
|
| Less: Raw materials inventory, ending |
|
|
| Raw materials used in production |
0 |
|
| Less: Indirect materials |
|
$0 |
| Manufacturing overhead cost applied to work in process |
|
|
| Direct labor |
|
0 |
| Total manufacturing costs |
|
|
| Add: Work in process inventory, beginning |
|
0 |
|
|
|
| Less: Work in process inventory, ending |
|
|
| Cost of goods manufactured |
|
$0 |
Question 2: The following cost data relate to the manufacturing activities Chang Company during the just completed year
The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $20 per machine-hour. A total of 21,700 machine-hours was recorded for the year.
| Manufacturing overhead costs incurred: |
|
| Indirect materials |
$17,000 |
| Indirect labor |
150,000 |
| Property taxes, factory |
10,000 |
| Utilities, factory |
90,000 |
| Depreciation, factory |
147,000 |
| Insurance, factory |
12,000 |
| Total actual manufacturing overhead costs incurred |
$426,000 |
|
|
| Other costs incurred: |
|
| Purchases of raw materials (both direct and indirect) |
$420,000 |
| Direct labor cost |
$80,000 |
| Inventories: |
|
| Raw materials, beginning |
$22,000 |
| Raw materials, ending |
$32,000 |
| Work in process, beginning |
$42,000 |
| Work in process, ending |
$72,000 |
Required:
1. Compute the amount of under applied or over applied overhead cost for the year.