Birk Co. uses a job order costing system. The following debits (credits) appeared in Birk's work-in-process account for the month of April: |
April | Description | Amount |
1 | Balance | $ 6,000 |
30 | Direct materials | 25,000 |
30 | Direct labor | 16,500 |
30 | Factory overhead | 13,300 |
30 | To finished goods | (49,500) |
Birk applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the only job still in process on April 30 has been charged with direct labor of $2,000. What was the amount of direct material charged to Job No.5? |
Multiple Choice
$4,000.
$25,000.
$7,700.
$11,300.
Answer:
Option 3rd is correct. i.e $7,700.
Work in process, ending balance: |
= Beg, $6,000 + DM, $25,000 + DL, $16,500 + OH, $13,300 – FG $49,500 |
=END $11,300 |
Direct materials charged to Job No. 5—x: |
x + $2,000 + 0.8($2,000) = $11,300 |
x + $3,600 = $11,300 |
x = $7,700 |
The Direct Materials charged to JOB NO.5=$7,700 |
Birk Co. uses a job order costing system. The following debits (credits) appeared in Birk's work-in-process...
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