Answer and Explanation:
The computation of the amount of underapplied or overapplied overhead cost is shown below:-
Overapplied overhead cost = Actual Manufacturing overhead costs - Manufacturing overhead applied
= $473,000 - (19,400 × $25)
= $473,000 - $485,000
= $12,000
2. The Preparation of cost of goods manufactured for the year is shown below:-
Chang Company
Cost of goods manufactured
Direct materials:
Raw materials inventory, beginning $20,000
Add: Purchases of raw materials $400,000
Raw materials available for use $420,000
Less: Raw materials inventory, ending $30,000
Raw materials used in production $390,000
Less: Indirect materials $15,000 $375,000
Direct labor $60,000
Manufacturing overhead cost
applied to work in process $485,000
Total manufacturing costs $920,000
Add: Work in process inventory, beginning $40,000
Less: Work in process inventory, ending $70,000
Cost of goods manufactured $890,000
