Answered

Get the answers you need at Westonci.ca, where our expert community is always ready to help with accurate information. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

The following cost data relate to the manufacturing activities of Chang Company during the just completed 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 The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 21,700 machine-hours were used during 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 the year.

Sagot :

Zviko

Answer:

Part 1

under-applied overheads = $8,000

Part 2

Schedule of cost of goods manufactured for the year.

Opening Work in process                                            $ 42,000

Add Direct Materials                                                   $393,000

Add Direct Labor                                                          $ 80,000

Add Applied Overheads                                             $434,000

Less Ending Work In Process                                    ( $ 72,000)

Cost of Goods Manufactured                                     $877,000

Explanation:

The amount of underapplied or overapplied overhead cost for the year.

Applied Overheads = Predetermined overheads rate x Actual machine hours

                                 = $20 x 21,700 machine-hours

                                 = $434,000

Since,

actual manufacturing overhead costs = $ 426,000

and

applied manufacturing overhead = $434,000

then

under-applied overheads = $8,000 ($434,000 - $ 426,000)

Schedule of cost of goods manufactured for the year.

Opening Work in process                                            $ 42,000

Add Direct Materials ($ 22 + $ 420 - $ 32 - $ 17)      $393,000

Add Direct Labor                                                          $ 80,000

Add Applied Overheads                                             $434,000

Less Ending Work In Process                                    ( $ 72,000)

Cost of Goods Manufactured                                     $877,000

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.