1 (210) 300-8823 enkins Company uses a job order cost system with overhead appli

Question

1 (210) 300-8823 enkins Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor ale is $20 per hour, and the predetermined overhead ae is $15 per direct labor hour. The company worked on three jobs during April Jobs A and B were in process at the beginning of April. Job A was completed and delivered to the customer Job 8 was completed during April, but not sold Job C was started during April, but not completed The job cost sheets nevealed the folowing costs for Aprt 1,100 Dieect Materials Used Applied Manufactuing Ovehead ,100 t no other jobs were started,complieted, or sold, determine the balanoe in each of the tollowing accounts atthe end opn of Goods Sold 3 4 5 command option option command

Explanation / Answer

a. Work in Progress in Job C only as it is not completed. Balance in Work in progress is calculated as follows     Direct Material cost                            $ 9,300     Direct Labour cost                                $ 3,100     Manufacturing cost                               $ 2,325 ?   Closing work in progress                     $ 14,725 b. Finished goods account balance in Job B     Cost of jobs in progress                       $ 1,100     Direct Material Cost                                8,200     Direct Labour cost                                  8,200     Applied Manufacturing overhead           6,150     Total cost in Finished Goods a/c         23,650 (c) Balance in Cost of goods sold in Job A:       Cost of job in progress in the beginning         $ 12,100       Direct Material cost                                              2,100       Direct labour ccost                                             10,200       Applied Manufacturing overhead                         7,650       Total balance in Cost of goods sold a/c             32,050       Note : Applied overhead in each process is calculated based on direct labour hours. This as follows in process                  wise                  Process A             Direct labour cost / Labour hour rate = 10200/20 = 510 hrs x applied rate 15 = 7,650                  Process B             Direct labour cost / labour hour rate =   8,200/20 = 410 hrs x applied rate 15 = 6,150                 Process C              Direct labour cost / labour hour rate   = 3,100/20   = 155 hurs x applied rate 15 = 2,325

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