The company uses a predetermined overhead rate of $21 per machine-hour to apply overhead cost to jobs. A total of 20,900 machine-hours were used during the year. Compute the amount of underapplied or overapplied overhead cost for the year. Prepare a schedule of cost of goods manufactured for the year Prepare a schedule of cost of goods manufactured for the year.
Answer 1.
Actual Manufacturing Overhead = $430,500
Manufacturing Overhead Cost = Machine-hours used * Predetermined Overhead Rate
Manufacturing Overhead Cost = 20,900 hours * $21
Manufacturing Overhead Cost = $438,900
Over-applied Overhead Cost = Manufacturing Overhead Cost – Actual Manufacturing Overhead
Over-applied Overhead Cost = $438,900 – $430,500
Over-applied Overhead Cost = $8,400
Answer 2.
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