Job A3B was ordered by a customer on September 25. During the month of September

Question

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B?

a) $11,500

b) $5,500

c) $14,500

d) $9,500

e) $6,500

Explanation / Answer

c) $14,500

Job A3B Direct Materials $       2,500 Direct Labor $       4,000 Overhead $       8,000 Total $     14,500 So, Balance in work in process at the end of September is $ 14,500 Working: Overhead applied = Direct Labor costs x 200% = $       4,000 x 200% = $       8,000 Costs to be incurred in october is not included in Work in process balance in September.

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