Pearson Architectural design began operations on January 2. The following activi
ID: 2329229 • Letter: P
Question
Pearson Architectural design began operations on January 2. The following activity was recorded in the company’s work in Process account for the first month of operations.
Work in Process
Cost of subcontracted work 90,000
Direct staff costs 200,000
Studio overhead 320,000
To completed projects 570,000
Pearson Architectural design is a service firm, so the names of accounts it uses are different from the names used in manufacturing companies. Costs of Sub concentrated Work is comparable to Direct Materials, Direct Staff Costs is the same as Direct Labor, Studio Overhead is the same as Manufacturing Overhead and Completed Projects is the same as Finished Goods. Apart from the difference in terms, the accounting methods used by the company are identical to the methods used by manufacturing companies.
Pearson Architectural Design uses a job costing system and applies studio overhead to Work in Process on the basis of direct staff costs. At the end of January, only one job was still in process. This job (the Krimmer Corporation Headquarters project) had been charged with $13,500 in direct staff costs.
REQUIRED:
1.Compute the predetermined overhead rate that was in use during January.
2.Compute the following job cost sheet for the partially completed Krimmer Corporation Headquarters project.
Job Cost Sheet
Kimmer Corporation Headquarters Project
As of January 31
Costs of subcontracted work_____________ $ ?
Direct staff costs________________________ ?
Studio Overhead________________________ ?
TOTAL COSTS TO JANUARY 31 _____________ $?
Work in Process
Cost of subcontracted work 90,000
Direct staff costs 200,000
Studio overhead 320,000
To completed projects 570,000
Explanation / Answer
Pearson Architectural Design Requirement 1 The Computation of the predetermined overhead rate that was in use during January Studio overhead is charged @160% of direct staff costs which can be evidenced as follows Direct staff costs 200000 Studio overhead 320000 predetermined overhead rate 1.6 of every one $ of direct staff costs OR Predetermined overhead rate 160 in percentage Requirement 2 Computation of job cost sheet for the partially completed Krimmer Corporation Headquarter's project Job Cost Sheet Krimmer Corporation Headquarter's project As of January 31 Amount in $ Costs of subcontracted work 4900 =(90000+200000+320000-13500-570000-21600) Direct staff costs 13500 Studio overhead(applying above overhead rate 21600 Total costs to January 31 40000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.