Applying Overhead to Jobs, Costing Jobs Gorman Company builds internal conveyor equipment to client specifications On...

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Question

Applying Overhead to Jobs, Costing Jobs Gorman Company builds internal conveyor equipment to client specifications On October

Amount Descriptions Refer to the list below for the exact wording of text items within your job-order cost sheets. Amount Des

1. Prepare a brief job-order cost sheet showing the October 1 balances of all four jobs, plus the direct materials and direct

Calculations and Job Price 2. Calculate the overhead applied to each job during October The overhead applied to Job 877 is $

business accounting

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Answer 1

Answer #1

Answer -

1. Answer -

Gorman Company
Job-Order Cost Sheet
For the Month of October
	Job 877	Job 878	Job 879	Job 880
Beginning balance	$18730	$0	$0	$0
Direct materials	$14550	$6070	$3580	$1880
Direct labor	$14200	$8600	$1900	$2100

2. Answer -


The overhead applied to Job 877 is	$10650
The overhead applied to Job 878 is	$6450
The overhead applied to Job 879 is	$1425
The overhead applied to Job 880 is	$1575

Calculation:

As per given information,

Overhead is applied to production at the rate of 75% of direct labor cost.

So,

Job 877:

= Direct labor cost * 75%

= $14200 * 75%

= $10650

Job 878:

= Direct labor cost * 75%

= $8600 * 75%

= $6450

Job 879:

= Direct labor cost * 75%

= $1900 * 75%

= $1425

Job 880:

= Direct labor cost * 75%

= $2100 * 75%

= $1575

3. Answer -


The balance in work in process for Job 878 is	$21120
The balance in work in process for Job 879 is	$6905
The balance in work in process for Job 880 is	$5555
The total balance in work in process	$33580

Calculation:

Job 878:

Work in Process balance:

= Beginning balance + Direct materials + Direct labor + Overhead applied

= $0 + $6070 + $8600 + $6450

= $21120

Job 879:

Work in Process balance:

= Beginning balance + Direct materials + Direct labor + Overhead applied

= $0 + $3580 + $1900 + $1425

= $6905

Job 880:

Work in Process balance:

= Beginning balance + Direct materials + Direct labor + Overhead applied

= $0 + $1880 + $2100 + $1575

= $5555

The total balance in work in process:

= $21120 + $6905 + $5555

= $33580

4. Answer -

The price of Job 877 is $87195

Calculation:

As per given information,

Client was billed at cost plus 50%

Therefore,

Price = Cost + (Cost * 50%)

So,

Total cost of Job 877:

= Beginning balance + Direct materials + Direct labor + Overhead applied

= $18730 + $14550 + $14200 + $10650

= $58130

Now,

Price = Cost + (Cost * 50%)

= $58130 + ($58130 * 50%)

= $87195

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