Question: EXERCISE 4-12 Applying Overhead; Cost of Goods Manufactured

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 jobs. 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.
2. Prepare a schedule of cost of goods manufactured for the year using the indirect method.

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