The Following Cost Data Relate to the Manufacturing Activities of the Kamas

question 5

Essay

The following cost data relate to the manufacturing activities of the Kamas Company during the most recent year:
$\text { Manufacturing overhead costs incurred during the year: }$
$\begin{array}{lccc} \text {Property taxes} & \$ 1,600 \\\text {Utilities, factory }& 2,600 \\\text {Indirect labour }& 5,100 \\\text {Depreciation, factory }& 13,000 \\\text {Insurance, factory }& 2,500 \\\text {Total actual costs }& \$ 24,800\\&----\\\text { Other costs incurred during the year: }\\ \text { Purchases of raw materials } & \$ 15,000 \\ \text { Direct labour cost } & 22,000\\\\\text { Inventories:}\\\text { Raw materials, beginning } & \$ 5,000 \\ \text { Raw materials, ending } & 4,400 \\ \text { Work in process, beginning } & 3,500 \\ \text { Work in process, ending } & 4,500\end{array}$





The company uses a predetermined overhead rate to charge overhead cost to production. The rate for the year just completed was $4.00 per machine hour; a total of 6,000 machine hours were recorded for the year.
Required:
a. Compute the amount of under- or overapplied overhead cost for the year just ended.
b. Prepare a schedule of cost of goods manufactured for the year.

---

Definitions:

Trade Name

The commercial name under which a business operates and is known to customers, distinct from the company's legal name.

Copyright

Legal protection granted to creators of original works, giving them exclusive rights to use, distribute, and reproduce their work for a certain period.

Franchisees

Individuals or entities that purchase the right to operate a business under the branding and business model of a franchisor.

Termination

The act of ending or concluding something, such as a contractual agreement, employment, or a legal entity.