Question

Jenkins Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor rate is $20 per hour, and the predetermined overhead rate 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 B was completed during April, but not sold. Job C was started during April, but not completed. The job cost sheets revealed the following costs for April: Cost of Jobs in Process, 4/1/2018 Direct Materials Used Direct Labor Applied Manufacturing Overhead Job A $12,200 2,200 10,400 Job B $1,200 8,400 8,400 Job C $ - 9,600 3,200 Required: If no other jobs were started, completed, or sold, determine the balance in each of the following accounts at the end of April: a. Work in Process b. Finished Goods C. Cost of Goods Sold

Answer 1

Calculation of Manufacturing overhead applied

	Job A	Job B	Job C
Direct labor	10,400	8,400	3,200
Direct labor rate per hour	$20	$20	$20
Direct labor hours (i)	10,400/20 = 520	8,400/20 = 420	3,200/20 = 160
Predetermined overhead rate per Direct labor hour (ii)	$15	$15	$15
Manufacturing overhead applied (i) x (ii)	$7,800	$6,300	$2,400

	Job A	Job B	Job C
Cost of job in process, beginning	12,200	1,200	0
Direct materials used	2,200	8,400	9,600
Direct labor	10,400	8,400	3,200
Manufacturing overhead applied	7,800	6,300	2,400
Total cost	$32,600	$24,300	$15,200

a	Work in process	$15,200
b	Finished goods	$24,300
c	Cost of goods sold	$32,600

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