Question

Job-Order Costing VariablesOn July 1, Job 46 had a beginning balance of $740. During July, prime costs added to the job totaled $620. Of that amount, direct materials were three times as much as direct labor. The ending balance of the job was $1,600.Required:1. What was overhead applied to the job during July?$ 2402. What was direct materials for Job 46 for July? Direct labor? If rounding is required, round your answers to the nearest cent.Direct labor $ 155Direct materials $ 4653. Assuming that overhead is applied on the basis of direct labor cost, what is the overhead rate for the company? Round your answer to the nearest whole percent. %I cannot seem to get number 3.Here are some hints:1. Find overhead applied by adding beginning balance to prime costs and subtracting from ending balance.2. Set up equation for prime cost using direct materials and direct labor. Let direct materials equal 3 times direct labor.3. Divide overhead by the direct labor for the rate.

Answer 1

Answer:

1. $240

2. $155

3. 154%

Explanation:

1. $240 This is calculated as {Closing Balance of job - (Opening Balance of job + Prime cost added to the job during the month)}  

{ $1600 - ( $740 + $620 )} = $240.

2. $155 The direct labor cost is calculated as, the prime cost added during the month is $620 which includes 3 parts of material and 1 part of labor which means this cost is made up of 4 figures so we divide the prime cost $620 with 4 which gives us $155.

$465 is the cost of material calculated in a similar way $155 is then multiplied by 3 because prime cost includes 3 parts of material cost. $155 * 3 = $465.

3. Overhead is calculated in 1. above and labor cost is calculated in 2. above both the amounts are divided to find the overhead rate on direct labor which is 154%. ( $240 / $155 * 100).