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 costs - $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

HELP WITH THIS:

Prepare a schedule of cost of goods manufactured for the year.

Answer 1

cost of goods manufactured= $890,000

Step-by-step explanation:

Giving the following information:

Applied Overhead= $485,000

Other costs incurred:

Purchases of raw materials (both direct and indirect) - $400,000

Direct labor costs - $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

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

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

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 20,000 + (400,000 - 15,000) - 30,000

Direct material used= 375,000

I deduct the indirect material included in manufacturing overhead.

cost of goods manufactured= 40,000 + 375,000 + 60,000 + 485,000 - 70,000

cost of goods manufactured= $890,000