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Question & Answer: The company uses a predetermined overhead rate of $21 per machine-hour to apply overhead cost to jobs. A to…..

Manufacturing overhead costs incurred: Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred $ 16,20e 142,606 9,200 82,000 169,906e 11,200 $ 430,50e Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labor cost $ 412,00e $ 72,0ee Inventories Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending $ 21,20e $ 31,200 $ 41,20e $ 71,20e The company uses a predetermined overhead rate of $21 per machine-hour to apply overhead cost to jobs. A total of 20,900 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a schedule of cost of goods manufactured for the year Chang Company Schedule of Cost of Goods Manufactured Direct materials Total raw materials available Raw materials used in production Total manufacturing costs Cost of goods manufactured

The company uses a predetermined overhead rate of $21 per machine-hour to apply overhead cost to jobs. A total of 20,900 machine-hours were used during the year. Compute the amount of underapplied or overapplied overhead cost for the year. Prepare a schedule of cost of goods manufactured for the year Prepare a schedule of cost of goods manufactured for the year.

Expert Answer

 

Answer 1.

Actual Manufacturing Overhead = $430,500

Manufacturing Overhead Cost = Machine-hours used * Predetermined Overhead Rate
Manufacturing Overhead Cost = 20,900 hours * $21
Manufacturing Overhead Cost = $438,900

Over-applied Overhead Cost = Manufacturing Overhead Cost – Actual Manufacturing Overhead
Over-applied Overhead Cost = $438,900 – $430,500
Over-applied Overhead Cost = $8,400

Answer 2.

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