Cost of goods manufactured

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Reference no: EM131124924

EXERCISE 3-13 Applying Overhead; Cost of Goods Manufactured [LO2, LO6, LO7]

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

Property taxes, factory . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3,000

Utilities, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,000

Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,000

Depreciation, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,000

Insurance, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,000

Total actual manufacturing overhead costs . . . . . . . . . . . .

$48,000

The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $5 per machine-hour; a total of 10,000 machine-hours was recorded for the year. All raw materials ultimately become direct materials-none are classified as indirect materials.

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.

Reference no: EM131124924

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