What am I having the most trouble with, is figuring out what the Actual Total Manufacturing Overhead is. Here is what I am working on and what I have completed so far. I get $225,000 for Actual Total Manufacturing Overhead but others have told me I am wrong, so I am a little confused and am not sure what I am doing wrong.


Beginning Balance Ending Balance
Raw materials………..$26,000 $20,000
Work in Process……..$71,000 $53,000
Finished goods………$66,000 $81,000

Acorn company applies overheard to jobs using a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated that it would work 44,000 machine hours and incur $176,000 in manufacturing overhead cost. The following transaction were recorded for the year:

Raw materials were purchased $459,000
Raw materials requisitioned for use in production $465,000 ($431,000 direct and $34,000 indirect)
Direct labor $296,000
Indirect labor $63,000
Administrative salaries $157,000
Selling costs $134,000
Factory utility cost $14,000
Depreciation for the year $119,000 of which $114,000 is related to factory operations and $5,000 is related to selling and administrative activities
Manufacturing overhead was applied to jobs. The actual level of activity for the year was 47,000 machine hours
Sales for the year totaled $1,287,000

A. Prepare a schedule of cost of goods manufactured in good form.

B. Was the overhead under- or overapplied? By how much?

C. Prepare an income statement for the year in good form. The company closes any under- or overapplied overhead to Cost of Goods Sold

This what I have for A:

A. Prepare a schedule of cost of goods manuf in good form

Schedule of Cost of Goods Manufactured

Direct Materials:
Beginning Raw Materials Inventory $26,000.00
Add: Purchases of Raw Materials $459,000.00
Total Raw Materials Available $485,000.00
Deduct: Ending Raw Materials Inventory $20,000.00
Raw Materials used in Production $465,000.00
Less: Indirect Materials $34,000.00
$431,000.00
Direct Labor $296,000.00
Manufacturing Overhead Applied $188,000.00
Total Manufacturing Costs $915,000.00
Add: Beginning Work in Process Inventory $71,000.00
$986,000.00
Deduct: Ending work in Process Inventory $53,000.00
Cost of Goods Manufactured $933,000.00


This is what I have for B:

B. Was the overhead under or overapplied? By how much?
$176,000 Manuf Overhead Cost /44,000 Mach-Hrs=$4.00 Predetermined Overhead Rate
$4*47,000 Actual Mach-Hrs= $188,000 Total Manuf Overhead Applied
$225,000 Actual Total Manuf Overhead - $188,000 Total Manuf Overhead Applied= $37,000 UnderApplied

Indirect Materials $34,000 + Indirect labor $63,000 + Factory Util Cost $14,000 + Depreciation of Factory Operations $114,000 = $225,000 Actual Total Manufacturing Overhead

This is what I have for C:

C. Prepare an income statement for the year in good form. The company closes any under or overapplied overhead to Cost of Goods Sold.


Schedule of Cost of Goods Sold
Beginning Finished Goods Inventory $66,000.00
Add: Cost of Goods Manufactured $933,000.00
Goods Available for Sale $999,000.00
Deduct: Ending Finished Goods Inventory $81,000.00
Unadjusted Cost of Goods Sold $918,000.00
Add Underapplied Overhead $37,000.00
Adjusted Cost of Goods Sold $955,000.00