The following cost data relate to the manufacturing activities of Chang Company during the just completed year:

The following cost data relate to the manufacturing activities of Chang Company during the just completed year:

   
 

Manufacturing overhead costs incurred:
Indirect materials	$	16,200
Indirect labor		142,000
Property taxes, factory		9,200
Utilities, factory		82,000
Depreciation, factory		169,900
Insurance, factory		11,200
Total actual manufacturing overhead costs incurred	$	430,500
Other costs incurred:
Purchases of raw materials (both direct and indirect)	$	412,000
Direct labor cost	$	72,000
Inventories:
Raw materials, beginning	$	21,200
Raw materials, ending	$	31,200
Work in process, beginning	$	41,200
Work in process, ending	$	71,200

  

The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $21 per machine-hour. A total of 20,900 machine-hours was recorded for the year.

   

Required:

1.	Compute the amount of underapplied or overapplied overhead cost for the year.

Explanation:

1.

Actual Manufacturing overhead costs	$	430,500
Manufacturing overhead applied:     20,900 MH × $21 per MH	$	438,900
Overapplied overhead cost	$	8,400