Practice Problem #1 Z Company makes custom motorboats. It incurred the following

Question

Practice Problem #1 Z Company makes custom motorboats. It incurred the following costs for the just- completed job B011. 500 pounds of direct materials were used at a cost per pound of $25. The job cost sheet indicates that a total of 90 direct labor-hours incurred on job B011. The workers were paid at a rate of $18 per hour. The company applies overhead based on machine hours. At the beginning of the year, it was estimated that the total amount of overhead would be $180,000 and a total of 30,000 machine hours would be incurred. Job B011 required 150 machine hours. Required: Determine the total cost assigned to Job B011 Practice Problem #2 T Company had 3 cookie orders in production at June 30: chocolate chip, oatmeal raisin and peanut butter. Material costs for chocolate chip and peanut butter were $500 and $350. Direct labor costs per batch were $200 and $250 for chocolate chip and oatmeal raisin, respectively and $600 in total. Overhead is applied at the rate of 50% of direct materials costs. Total costs for the oatmeal raisin batch were $1,150. Required: What was the balance in work-in-process at June 30?

Explanation / Answer

1) Overhead rate = 180000/30000 = 6 per machine hour

2) Calculate balance in work in process :

WOrk in process at the june 30 = (950+1150+675) = 2775

Direct material (500*25) 12500 Direct labour (90*18) 1620 Overhead applied (6*150) 900 Total job cost 15020

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