Question

The following cost data relate to the manufacturing activities of Black Company during the just completed year:


Manufacturing overhead costs:
Property taxes, factory $ 3,000
Utilities, factory 4,800
Indirect labor 9,900
Depreciation, factory 23,900
Insurance, factory 5,800

Total actual manufacturing overhead costs $ 47,400

Other costs incurred:
Purchases of raw materials $ 31,600
Direct labor cost $ 39,600
Inventories:
Raw materials, beginning $ 8,400
Raw materials, ending $ 6,400
Work in process, beginning
$ 5,400
Work in process, ending $ 7,900

The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $5 per machine-hour; a total of 12,000 machine-hours was recorded for the year. All raw materials ultimately become direct materials—none are classified as indirect materials.

Required:
1.
Compute the amount of underapplied or overapplied overhead cost for the year. (Input the amount as a positive value.)

Answer 1

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