3. eBook Exercise 5.12 Predetermined Overhead Rate, Application of Overhead to J

Question

3. eBook Exercise 5.12 Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost On April 1, Sangvikar Company had the following balances in its inventory accounts: Materials Inventory Work-in-Process Inventory Finished Goods Inventory $12.730 21,340 8,700 Work-in-process inventory is made up of three jobs with the following costs: Job 114 Job 115 Job 116 Direct materials Direct labor Applied overhead 2,411 1,800 1,170 $2,640 1,560 ,014 $3,650 4,300 2,795 During April, Sangvikar experienced the transactions listed below. a. Materials purchased on account, $29,000. b. Materials requisitioned: Job 114, $16,500; Job 115, $12,200; and Job 116, $5,000 c. Job tickets were collected and summarized: Job 114, 150 hours at $12 per hour; Job 115, 220 hours at $14 per hour; and Job 116, 80 hours at $18 per hour. d. Overhead is applied on the basis of direct labor cost e. Actual overhead was $4,415 f. Job 115 was completed and transferred to the finished goods warehouse. g. Job 115 was shipped, and the customer was billed for 125 percent of the cost. Required: 1. Calculate the predetermined overhead rate based on direct labor cost. http://sjc.cengagenow.comilm/takeAssignment/printUntakenAssignment do?assignmentl.. 3/17/2018

Explanation / Answer

1 Predetermined overhead rate Manufacturing overhead 1170 Direct labor 1800 Predetermined overhead rate 65% 2 Job 114 Job 115 Job 116 Total Beginning work in progress 5381 5214 10745 21340 Material 16500 12200 5000 33700 Labor 1800 3080 1440 6320 Manufactuirng overheads (machine hour *rate) 1170 2002 936 4108 (1800*.65) (3080*.65) (1440*.65) Ending balance as on april 30 24851 22496 18121 65468 3 Ending balance work in progress Job 114 24851 Job 116 18121 Total 42972 4 Cost of goods sold Job 115 22496 5 Price of job 115 28120 (22496*1.25)

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