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 September, 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? Multiple Choice $16,000 $22,500 $37,000 $26,500 $32,000

Answer 1

At the end of September total cost =

Material=2500

Labour=4000

Overheads(200% of direct labour)=8000 (4000*200%)

Total=14500$

At the end of October total cost=

Material=3000

Labour=6500

Overheads(200% of direct labour)=13000(6500*200%)

Total=22500$

Total cost of the job at the end of October when it is completed=22500$+14500$=37000$