Question

Calculate the ending balance of the Overhead account for November.

Pedro Morales and Associates, a CPA firm, uses job-order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November: Direct materials Auditor labour costs Auditor hours Koppel $780 $5,510 72 Dupont $400 $6,650 Rojas $250 $3,405 49 93 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $63 per auditor hour. The Koppel job is the only incomplete job at the end of November. Actual overhead for the month was $12,950.

Answer 1

Total Auditor's hours:
Koppel			72
Dupont			93
Rojas			49
Total Auditor's hours:	214
Overheads applied:
Total Auditor's hours		214	hours
Multiply: Oh rate per auditor hour	63
Overheads applied:		13482
OVERHEAD ACCOUNT
			Debit $	Credit $
Beginning balance		0
Accounts payable		12950	13482	Work in process inventory
				532	Ending balance
Thus,
Overheads account balance: $ 532 Credit