A company uses a job order cos accounting system and applies overhead on the bas

Question

A company uses a job order cos accounting system and applies overhead on the basis of direct labor cost. At the end of a recent period, the company's Goods in Process Inventory account appeared as follows:

Date Explanation: PR Debit Credit Balance
March 17 Job No 5 completed G-8 90900 (17100)
April 13 Job No 6 completed G-10 131400 (148500)
July 20 Job No 7 completed G-12 73800 (222300)
October 11 Job No 8 completed G-15 163800 (390600)
December 31 Direct Materials G-20 235800 (154800)
31 Direct Labor G-20 117000 (37800)
31 Factory Overhead G-20 187200 149400

Fill in the blanks for the following:

1. The total cost of the direct materials, direct labor, and factory overhead applied in the Dec 31 goods n process inventory is $_________________

2. The company's overhead application rate is ________________%

3. Job No 6 had 26550 of direct labor cost. Therefore, the job must have had $_________ of direct materials cost.

4. Job No 8 had $ 73998 of direct materials cost. Therefore, the job must have had $_________ of factory overhead cost.

Explanation / Answer

1. 235800 2. 21% 3. 131400 - 26550 = 104850 4. 163800 - 73998 = 89802

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