Question

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

Indirect materials $ 15,000
Indirect labor 130,000
Property taxes, factory 8,000
Utilities, factory 70,000
Depreciation, factory 240,000
Insurance, factory 10,000
Total actual manufacturing overhead costs incurred $ 473,000
Other costs incurred:
Purchases of raw materials (both direct and indirect) $ 400,000
Direct labor cost $ 60,000
Inventories:
Raw materials, beginning $ 20,000
Raw materials, ending $ 30,000
Work in process, beginning $ 40,000
Work in process, ending $ 70,000
Manufacturing Overhead
Actual Overhead Applied Overhead
$473,000 $485,000
$12,000 was overapplied
Prepare a schedule of cost of goods manufactured for the year.

Answer 1

Cost of goods manufactured= $905,000

Step-by-step explanation:

To calculate the cost of goods manufactured, we need to use the following formula:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

Schedule cost of goods manufactured:

Beginning WIP= 40,000

Direct materials used= 20,000 + 400,000 - 30,000= 390,000

Direct labor= 60,000

Allocated manufacturing overhead= 485,000

Ending WIP= (70,000)

Cost of goods manufactured= $905,000