Answer:
<u>a schedule of cost of goods manufactured</u>
Direct Raw materials $281,000
Direct Labor $377,000
Indirect Raw materials $26,000
Indirect Labor $96,000
Factory utility costs: $10,000
Depreciation - factory operations $120,000
Add Opening Work In Process $27,000
Less Closing Work In Process ($9,000)
cost of goods manufactured $928,000
Under Recovery = $14,000
Explanation:
a. Prepare a schedule of cost of goods manufactured.
Raw Materials Used in Manufacturing = $14,000+$315,000-$22,000
= $307,000
<u>a schedule of cost of goods manufactured</u>
Direct Raw materials $281,000
Direct Labor $377,000
Indirect Raw materials $26,000
Indirect Labor $96,000
Factory utility costs: $10,000
Depreciation - factory operations $120,000
Add Opening Work In Process $27,000
Less Closing Work In Process ($9,000)
cost of goods manufactured $928,000
b. Was the manufacturing overhead under- or overapplied
Factory Overheads Applied = Predetermined Rate × Actual Activity
Predetermined Rate = Budgeted Overheads/ Budgeted Activity
= $231,000/33,000 machine hours
=$7.00 per machine hour
Factory Overheads Applied = $7.00 × 34,000 machine hours
= $238,000
<u>Actual Overheads </u>
Indirect Raw materials $26,000
Indirect Labor $96,000
Factory utility costs: $10,000
Depreciation - factory operations $120,000
Total $252,000
Actual Overheads $252,000 > Factory Overheads Applied $238,000
Under Recovery = $14,000
