Question

Question 1 A job cost sheet for Rolen Company is shown below. Job No. 92 Direct Materials Direct Labour For 2,000 Units Manufacturing Overhead Date Beginning Balance January 1 $5,300 $3,180 $4,088 6,250 8 12 8,630 6,904 25 2,090 27 4,810 18,740 3,848 13,932 12,428 Cost of completed job: Direct materials Direct labour Manufacturing overhead Total cost Unit cost ($45,100 + 2,000) $12,428 18,740 13,932 $45,100 $22.55 (a) On the basis of the foregoing data, answer the following questions: 1. What was the balance in Work in Process Inventory on January 1 if this was the only unfinished job? The balance in Work in Process Inventory 2. If manufacturing overhead is applied on the basis of direct labour cost, what overhead rate was used in each year? Last year This year Overhead rate % %

Answer 1

(a) Balance in work in process inventory on January 1
Particulars	Amount in $
Direct Material	4,088
Direct Labour	5,300
Manufacturing Cost	3,180
Total Work In Progress	12,568
(b) Overhead Rate
	Last Year	This Year
Overhead Rate	60%	80%
Manfacturing Overhead/Direct Labour Cost *100	(3180/5300)*100	(6940/8630)*100