The following cost data relate to the manufacturing activities of the Kanaba Company last year:
|
Manufacturing overhead costs: |
|
|
Property taxes |
$1,500 |
|
Utilities, factory |
2,500 |
|
Indirect labor |
5,000 |
|
Depreciation, factory |
12,000 |
|
Insurance, factory |
3,000 |
|
Total |
$24,000 |
|
Other costs incurred: |
|
|
Purchases of direct materials |
$16,000 |
|
Direct labor cost |
$20,000 |
|
Inventories: |
|
|
Direct materials, January 1 |
$4,000 |
|
Direct materials, December 31 |
$3,500 |
|
Work in process, January 1 |
$3,000 |
|
Work in process, December 31 |
$3,750 |
The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The rate last year was $5.00 per machine-hour; a total of 5,000 machine-hours were recorded for the year.
Required:
a. Compute the amount of under- or overapplied overhead cost for the year.
b. Prepare a schedule of Cost of Goods Manufactured for the year.