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The following cost data relate to the manufacturing activities of Black Diamond Ski Company during 2013:
Manufacturing Overhead Costs:
Property taxes, factory $ 3,000
Utilities, factory $ 5,000
Indirect labor $10,000
Depreciation, factory $24,000
Insurance, factory $ 6,000
Total Actual Manufacturing OH Costs $48,000 Other Costs Incurred: Purchases of raw materials $32,000 Direct labor costs $40,000 The Black Diamond Ski Company used 10,200 machine hours during the period. Inventories: Raw Materials, 1/1/13 $ 8,000 Raw Materials, 12/31/13 $ 7,000 Work in Process, 1/1/13 $ 6,000 Work in Process, 12/31/13 $ 7,500 The company uses normal costing to record product costs. The company budgeted for $52,500 in total overhead costs for the year. The cost driver associated with the overhead is machine hours and the company expected to use 10,500 machine hours.
REQUIRED:
1) Compute the amount of over-applied or under-applied overhead cost for the year.
2) Determine the cost of goods manufactured for the year.

Sagot :

ayokenny2001

Answer:

See Below

Explanation:

1.

= Actual manufacturing overhead cost - Budgeted total overhead

Actual manufacturing overhead cost = $48,000

Budgeted total overhead = $52,500

= $48,000 - $52,500

= $4,500

The above is under applied overhead since Budgeted overhead is more than the actual overhead expended.

2. Cost of goods manufactured

Inventories ; raw materials at the beginning

$8,000

Add purchases of raw materials

$32,000

Less direct materials ending

$7,000

Direct materials used

$33,000

Direct labor cost

$40,000

Manufacturing overhead cost

$77,000

Indirect labor

$10,000

Property tax

$3,000

Utilities factory

$3,000

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