Job A3B was ordered by a customer on September 25. During the month of September

Question

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?

Explanation / Answer

$37,000
September job costs: RM $2,500 + DL $4,000 + OH ($4,000 * 2) = $14,500
October job costs: RM $3,000 + DL $6,500 + OH ($6,500 * 2) = $22,500
Total costs: September $14,500 + October $22,500 = $37,000
Work in process contains the sum of the costs on job cost sheets for jobs that are not yet complete.

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