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uses a job order cost system with overhead applied to jobs on the basis of direc

ID: 2328061 • Letter: U

Question

uses a job order cost system with overhead applied to jobs on the basis of direct labor hours . The direct labor rate is $20 per hour, and the predetermined overhoad rate is $15 per direct labor hour. The company worked on three jobs during Apri. Jobs A and B were in process at the beginning of Apri. Job A was completed and delivered to the customer April, but not sold. Job C was started during April, but not completed. The job cost sheets revealed the following costs for April: Job A $12,000 2,000 10.000 Job B $1,000 8,000 8,000 9,000 3,000 Direct Labor Required: completed, or sold, determine the balance in each of the following accounts at the end of Api 15,000 8

Explanation / Answer

Calculate cost of each job :

Work in process = $14250

Finished goods = $23000

Cost of goods sold = $31500

Job A Job B Job C Cost of job in process, 4/1/2016 12000 1000 - Direct material used 2000 8000 9000 Direct labour 10000 8000 3000 Applied manufacturing overhead 7500 6000 2250 Total cost of job 31500 23000 14250