Response to the following problem:
The following cost data relate to the manufacturing activities of Chang Company during the just completed year:
Manufacturing overhead costs incurred:
Indirect materials .......................................................................... $ 15,000
Indirect labor 130,000
Property taxes, factory ....................................................................... 8,000
Utilities, factory ................................................................................ 70,000
Depreciation, factory ..................................................................... 240,000
Insurance, factory ............................................................................. 10 000
Total actual manufacturing overhead costs incurred ............. $473,000
Other costs incurred:
Purchases of raw materials (both direct and indirect).......... $400,000
Direct labor cost ............................................................................. $60,000
Inventories:
Raw materials, beginning ............................................................... $20,000
Raw materials, ending .................................................................... $30,000
Work in process, beginning ........................................................... $40,000
Work in process, ending. ............................................................... $70,000
The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $25 per machine-hour. A total of 19,400 machine-hours was recorded for 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 theyear.