Osborn Manufacturing uses a predetermined overhead rate of $18.60 per direct labor-hour. This predetermined rate was...

 

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Osborn Manufacturing uses a predetermined overhead rate of $18.60 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $230,640 of total manufacturing overhead for an estimated activity level of 12,400 direct labor-hours. The company actually incurred $225,000 of manufacturing overhead and 11,900 direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much? The following cost data relate to the manufacturing activities of Chang Company during the just completed year Manufacturing overhead costs incurred: Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred. Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labor cost Inventories: Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending $ 16,800 148,000 9,800 88,000 295,300 11,800 $ 569,700 $418,000 $ 78,000 $ 21,800 $ 31,800 $ 41,800 $ 71,800 The company uses a predetermined overhead rate of $27 per machine-hour to apply overhead cost to jobs. A total of 21.500 machine- hours were used during the year. Required: 1. Compute the amount of underapplied or overapplied overhead cost for the year. 2. Prepare a schedule of cost of goods manufactured for the year. Osborn Manufacturing uses a predetermined overhead rate of $18.60 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $230,640 of total manufacturing overhead for an estimated activity level of 12,400 direct labor-hours. The company actually incurred $225,000 of manufacturing overhead and 11,900 direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much? The following cost data relate to the manufacturing activities of Chang Company during the just completed year Manufacturing overhead costs incurred: Indirect materials Indirect labor Property taxes, factory Utilities, factory Depreciation, factory Insurance, factory Total actual manufacturing overhead costs incurred. Other costs incurred: Purchases of raw materials (both direct and indirect) Direct labor cost Inventories: Raw materials, beginning Raw materials, ending Work in process, beginning Work in process, ending $ 16,800 148,000 9,800 88,000 295,300 11,800 $ 569,700 $418,000 $ 78,000 $ 21,800 $ 31,800 $ 41,800 $ 71,800 The company uses a predetermined overhead rate of $27 per machine-hour to apply overhead cost to jobs. A total of 21.500 machine- hours were used during the year. Required: 1. Compute the amount of underapplied or overapplied overhead cost for the year. 2. Prepare a schedule of cost of goods manufactured for the year.