Question

E2-11 (Algo) Calculating Cost of Jobs in Work in Process, Finished Goods, and Cost of Goods Sold [LO 2- Jenkins Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor rate is $20 per hour, and the predetermined overhead rate is $15 per direct labor hour. The company worked on three jobs during April. Jobs A and B were in process at the beginning of April. Job A was completed and delivered to the customer. Job B was completed during April, but not sold. Job C was started during April, but not completed. The job cost sheets revealed the following costs for April: Job B Job C Cost of Jobs in Process, 4/1/2018 Direct Materials Used Direct Labor Applied Manufacturing Overhead Job A $11,400 1.400 8.800 $1,100 6.800 6.800 7,200 2.400 Required: If no other jobs were started, completed, or sold, determine the balance in each of the following accounts at the end of April: a. Work in Process b. Finished Goods c. Cost of Goods Sold

Answer 1

Calculation of Manufacturing overhead applied

	Job A	Job B	Job C
Direct labor	8,800	6,800	2,400
Direct labor rate per hour	$20	$20	$20
Direct labor hours (i)	8,800/20 = 440	6,800/20 = 340	2,400/20 = 120
Predetermined overhead rate per Direct labor hour (ii)	$15	$15	$15
Manufacturing overhead applied (i) x (ii)	$6,600	$5,100	$1,800

Calculation of costs of jobs

	Job A	Job B	Job C
Cost of job in process, beginning	11,400	1,100	0
Direct materials used	1,400	6,800	7,200
Direct labor	8,800	6,800	2,400
Manufacturing overhead applied	6,600	5,100	1,800
Total cost	$28,200	$19,800	$11,400

a	Work in process	$11,400
b	Finished goods	$19,800
c	Cost of goods sold	$28,200

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