Magnum Incorporated began operations in July of the current year. Magnum uses th

Question

Magnum Incorporated began operations in July of the current year. Magnum uses the job order cost system and applies overhead to jobs on a basis of $15 per machine hour. The following information is for July:

Direct materials cost

Direct labor cost

Machine hours

Job 20

$1,200

$10,200

90

Job 21

$1,025

$8,000

80

Job 22

$2,200

$9,180

120

Jobs 20 and 22 have been completed. The balance is work-in-process inventory on July 31 is

Direct materials cost

Direct labor cost

Machine hours

Job 20

$1,200

$10,200

90

Job 21

$1,025

$8,000

80

Job 22

$2,200

$9,180

120

Explanation / Answer

Here job 20 and 22 is completed . So it means that job 21 is work in progress.

So work in progress will be as follow-

Direct Material= $1025

Direct Labour Cost=$8000

Overhead cost ( (80*15)=$1200

Total work in progress as on july 31 is= $10225

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