Question

Help Save & Exit Submit Siama Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $5,800 for direct materials, $8,500 for direct labor, and $6,375 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $3,100 for direct materials and 55,100 for direct labor. Required: 1a. Should any overhead cost be applied to Job Wat year-end? Yes 1b. How much overhead cost should be applied to Job W? Overhead cost 2. How will the costs included in Job W's job cost sheet be reported within Sigma Corporation's financial statements at the end of the year? Raw Materials Work-in-Process Finished Goods

Answer 1

Answer :-

1a. Should any overhead cost be applied to Job W at year-end :- YES

1b. Calculation of Overhead cost :-

Job V had $8,500 of direct labor, and $6,375 of overhead was applied to the job. So the overhead rate is :-

Overhead Rate = $6,375 / $8,500 = 0.75 or 75%

Overhead Cost = $5,100 *75% = $3,825

The overhead cost to be applied to Job W is $3,825

2. How will the costs included in Job W's job cost sheet be reported within Sigma Corporation's financial statements at the end of the year. :- Work-in-process

If you have any query ask in comment section. If you like the answer plz rate. Thanks