The following cost data relate to the manufacturing activities of Black Diamond Ski Company during 2013: Manufacturing Overhead Costs:
Property taxes, factory $ 3,000
Utilities, factory $ 5,000
Indirect labor $10,000
Depreciation, factory $24,000
Insurance, factory $ 6,000
Total Actual Manufacturing OH Costs $48,000 Other Costs Incurred: Purchases of raw materials $32,000 Direct labor costs $40,000 The Black Diamond Ski Company used 10,200 machine hours during the period. Inventories: Raw Materials, 1/1/13 $ 8,000 Raw Materials, 12/31/13 $ 7,000 Work in Process, 1/1/13 $ 6,000 Work in Process, 12/31/13 $ 7,500 The company uses normal costing to record product costs. The company budgeted for $52,500 in total overhead costs for the year. The cost driver associated with the overhead is machine hours and the company expected to use 10,500 machine hours.
REQUIRED:
1) Compute the amount of over-applied or under-applied overhead cost for the year.
2) Determine the cost of goods manufactured for the year.