Amount of underapplied or overapplied overhead costs

See the attached file for the full problem.

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

The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $5 per machine-hour; a total of 10,000 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.
Prepare a schedule of cost of goods manufactured for the year.

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Solution Summary

Response provides the steps to compute the amount of underapplied or overapplied overhead costs