The following cost data relate to the manufacturing activities of the Kanaba Company last year:
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Manufacturing overhead costs:
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|
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Property taxes
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$ 1,500
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Utilities, factory
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2,500
|
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Indirect labor
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5,000
|
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Depreciation, factory
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12,000
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Insurance, factory
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3,000
|
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Total
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$24,000
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Other costs incurred:
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|
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Purchases of direct materials
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$16,000
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Direct labor cost
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$20,000
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Inventories:
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|
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Direct materials, January 1
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$4,000
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Direct materials, December 31
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$3,500
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Work in process, January 1
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$3,000
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Work in process, December 31
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$3,750
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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.