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11 February, 06:34

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 in October and additional direct labor of $6,500 to finish the job. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October

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  1. 11 February, 06:44
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    The amount of job costs added to Work in Process Inventory during October is $37,000

    Explanation:

    Job A3B was ordered by a customer on September 25.

    The company applies overhead at a rate of 200% of the direct labor cost incurred.

    Cost of September:

    $2,500 of Direct Materials (DM)

    $4,000 of Direct Labor (DL)

    $4,000 manufactured overhead (OH)

    Total job cost = DM + DL + (OH)

    Total Job Cost = $2500+$4000 + ($4000*200%)

    Total Job Cost=$2500+$4000+$8000

    Total Job Cost=14500 (Cost for September)

    Cost of October:

    $3,000 of direct materials

    $6,500 of direct labor

    $6,500 manufactured overhead

    Total job cost = DM + DL + (OH)

    Total Job Cost = $3000+$6500 + ($6500*200%)

    Total Job Cost=$3000+$6500+$13000

    Total Job Cost=22500 (Cost for October)

    Total cost of Job A3B = September $14,500 + October $22,500 = $37,000

    Work in process contains the sum of the costs on job cost sheets for jobs that are not yet complete.
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