Waltman and Associates, a public accounting firm, uses job-order costing to capt
ID: 2541518 • Letter: W
Question
Waltman and Associates, a public accounting firm, uses job-order costing to capture the costs
of its audit jobs. There were no audit jobs in process at the beginning of November. Listed
below are data concerning the three audit jobs conducted during November:
Koppel Dupont Rojas
Direct Materials $650 $570 $435
Auditor Labour Costs $4,700 $6,100 $5,775
Auditor Hours 64 75 70
Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined
overhead rate is $58 per auditor hour. The Koppel job is the only incomplete job at the end of
November. Actual overhead for the month was $12,500.
Would you be able to help me with the following ?
1. Determine the cost of each job.
2. Indicate the balance of the Work in Process account at the end of November.
3. Calculate the ending balance of the Overhead account for November.
Explanation / Answer
OH costs to be allocated based on the predetermined rate of $58 / audit hours.
2. All costs of Koppel will be in Work in process account at the end of November since the job was not complete. Hence the closing balance of WIP account will be $ 9062.
3. Overhead costs have been allocated to jobs on at a predetermined rate @ $ 58 / audit hour. So now total OH recovered in the onth of November = 3712 + 4350 + 4060 = 12,122. This means that OH costs have not been recovered, and under applied by $378 (12500-12122). OH account will have a closing debit balance of $378 and might be adjusted in next month.
1. Koppel Dupont Rojas Direct materials 650 570 435 Labour costs 4,700 6,100 5,775 Auditor hours 64 75 70 OH costs 3,712 4,350 4,060 Cost of each job 9,062 11,020 10,270Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.