Question

Sigma 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 $6,500 for direct materials, $9,500 for direct labor, and $6,365 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $2,600 for direct materials and $4,900 for direct labor.
Required:
Calculate the overhead cost be added to Job W at year-end.

Answer 1

Answer:

$3,283

Explanation:

Calculation for the overhead cost be added to Job W at year-end

Using this formula

Overhead cost =(Overhead cost / Direct Labor) *Job W Direct Labor

Overhead cost=($6,365 / $9,500) *$4,900

Overhead cost=0.67*$4,900

Overhead cost=$3,283

Therefore the overhead cost be added to Job W at year-end is $3,283