Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below Boat Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost. Cost flows through the Work in Process Inventory account during March are given below a Beginning Balance Direct Materials Direct Labor Overhead Ending Balance e Transferred Out 195,e8 57,800 100,800 120,800 82,800 Only Job #007 was still in process at the end of March and this job had been charged with $16,000 in direct materials cost The amount of overhead costs applied to Job #007 during March was: Multiple Choice $66,000 $30.000 $36,000 $84,000

Explanation / Answer

Answer:

The amount of overhead cost applied to #007=$36,000

Working notes to the answer:

The predetermined overhead application rate at Capri Boat

=120,000 /100,000

=1.2

$82,000 - $16,000 = $66,000

: DL + 1.2DL = $66,000

DL = $30,000;

OH = $66,000 - $30,000 or $36,000

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