2 MSNcomHormai Ouil Suggested Stcs Outok Wieb App IIo Natifi

2 MSN.com-Hormai Ouil Suggested Stcs Outok Wieb App IIo Natifications ADP3 y ESA 3rd Party Question 6 (of 7) value 2.00 points Exercise 2-12 Applying Overhead, Cost of Goods Manufactured [LO2-2, LO2-6 The following cost data relate to the manufacturing activities of Chang Company during the just completed year. Manufacturing overhead costs incurred Indirect materials Indirect labor Property taxes, factory Utilities, fact Depreciation, factory Insurance, factory s 15,600 136,000 8,600 76,000 250,700 10,600 Total actual manufacturing overhead costs incurred $ 497,500 Other costs incurred Purchases of raw materials (both direct and indirect) Direct labor cost $ 406,000 S 66,000 Inventories Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending S 20,600 $ 30,600 s 40,600 $ 70,600 The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $25 per machine-hour. A total of 20,300 machine hours was recorded for the year Required: 1. Compute the amount of underapplied or overapplied overhead cost for the year overhead cost

Solution

Answer

Actual Manufacturing Overhead

         497,500

Budgeted Manufacturing Overhead (20,300 MH * $25)

         507,500

Over applied Mfg. Overhead

         (10,000)

Chang Company

Direct Material

Opening Raw Material

         20,600

Add: Raw Material Purchased

      406,000

Raw material available for sale

      426,600

Less: Closing Raw Material

         30,600

Raw Material used in Production

      396,000

Less: Indirect Material

         15,600

   380,400

Direct Labor

     66,000

Manufacturing Overhead Cost applied to WIP

   507,500

Total Manufacturing Cost

   953,900

Add: Beginning WIP

     40,600

   994,500

Less: Closing WIP

     70,600

Cost of Goods Manufactured

   923,900

Actual Manufacturing Overhead	497,500
Budgeted Manufacturing Overhead (20,300 MH * $25)	507,500
Over applied Mfg. Overhead	(10,000)