Question

Taylor Construction Company uses a job-order costing system. The company had 3 jobs in process at the beginning of the month Job 302. Job 303, and Job 304). The beginning balance of the Work In Process account was $145,400, consisting of $42,400, 565, 100, and $37.900 shown on the job cost sheets for Jobs 302, 303, and 304, respectively. During the month. Taylor added the following materials and labor costs to each job: Inventory Materials Labor $32.000 Job 302 Job 303 Job 304 $18,000 $10,200 $12,400 $16,500 $39,100 $10,000 Total $60,000 Overhead costs are applied at the predetermined rate of $0.60 per direct labor dollar. Actual overhead costs for the month were $36,800, Taylor completed Job 303 and sold it for $129,000 cash during the month Determine the balance of the Work In Process Account at the end of the month.

Answer 1

Determine the balance of the work in process account

Job 302 and Job 304 is under work in process

	Job 302	Job 304
Beginning balance	42400	37900
Direct material	10200	16500
Direct labor	32000	10000
Overhead	19200	6000
Total	103800	70400

Balance in work in process account = 103800+70400 = 174200

b) Applied overhead = 60000*.60 = 36000

Actual overhead = 36800

Under applied overhead = 800

By this under applied overhead cost of goods sold increase by $800