Question

1. Applying Overhead to Jobs, Costing Jobs Gorman Company builds internal conveyor equipment to client specifications. On October 1, Job 877 was in process with a cost of $18,640 to date. During October, Jobs 878, 879, and 880 were started. Data on costs added during October for all jobs are as follows:_______.
A. Job 877
B. Job 878
C. Job 879
D. Job 880
2. Direct materials
A. $14,460
B. $6,000
C. $3,500
D. $1,800
3. Direct labor
A. 14,800
B. 8,500
C. 1,750
D. 2,150
4. Overhead is applied to production at the rate of 80% of direct labor cost. Job 877 was completed on October 28, and the client was billed at cost plus 50%. All other jobs remained in process.
Required:.
A. Prepare a brief job-order cost sheet showing the October 1 balances of all four jobs, plus the direct materials and direct labor costs during October.
B. Calculate the overhead applied to each job during October.
C. Calculate the balance in Work in Process on October 31. If an amount box does not require an entry, leave it blank or enter zero ("0").
D. What is the price of Job 877?

Answer 1

Answer:

Job           877           878 879        880

Beginning 18,640  

Materials 14,460 6,000    3,500     1,800

Labor        14,800 8,500 1,750      2,150

Overhead 11,840 6,800 1,400      1,720    

Total       59,740     21,300     6,650      5,670

WIP 21300 + 6650 + 5670 = 33,620

Job 877 59,740 x (1 + 50%) = 89610

Explanation:

The overhead will be calcualte as 80% of the labor cost as tstated in the assignment

Then, the total cost will be the sum of the three cost component added during the period andthe beginnign WIP is there is any,

as job 877 is complete it will be removed from WIP leaving only the other three jobs.

the markup is 50% of the cost so we simply multiply cost by 1.5