|
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
|
|
|
|
|
|
|
||
