The following cost data relate to the manufacturing activities of the Kanaba Company last year:

Manufacturing overhead costs:

Property taxes

$ 1500

Utilities factory

2500

Indirect labor

5000

Depreciation factory

12000

Insurance factory

3000

Total

$24000

Other costs incurred:

Purchases of direct materials

$16000

Direct labor cost

$20000

Inventories:

Direct materials January 1

$4000

Direct materials December 31

$3500

Work in process January 1

$3000

Work in process December 31

$3750

The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The rate last year was $5.00 per machine-hour; a total
of 5000 machine-hours were recorded for the year.

Required:

a. Compute the amount of under- or overapplied overhead cost for the year.

b. Prepare a schedule of Cost of Goods Manufactured for the year.