Question

Current Attempt in Progress Don Lieberman 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 labor costs Auditor hours Waters Inc. $600 $5,400 72 Renolds Inc. $400 $6,600 88 Bayfield Inc. $200 $3,375 45 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $50 per auditor hour. The Waters job is the only incomplete job at the end of November. Actual overhead for the month was $11,000. (a) Determine the cost of each job. Cost Waters $ Renolds $ Bayfield $

Answer 1

A B с D 1 a) 2 Cost 3 Waters $ 9,600 4. Renolds $ 11,400 5 Bayfield $ 5,825 6 7 Working note: 8 Waters Renolds Bayfield 9 Direct materials $ 600$ 400 $ 200 10 Auditor labor costs $ 5,400$ 6,600 $ 3,375 11 Overhead applied $ 3,600 $ 4,400 $ 2,250 12 Total cost $ 9,600 $ 11,400 $ 5,825 13 14 b) 15 Balance in service contracts in process account (Waters) $ 9,600 16 17 c) 18 Actual overhead (Debit) $ 11,000 19 Overhead applied (Credit) $ 10,250 20 Balance in operating overhead account $ 750 Debit 21 22 Note: Debit balance is more than the credit balance.

B A B с D 1 a) 2 Cost 3 Waters =+B12 4. Renolds =+C12 5 Bayfield =+D12 6 7 Working note: 8 Waters Renolds Bayfield 9 Direct materials 600 400 200 10 Auditor labor costs 5400 6600 3375 11 Overhead applied =72*50 =88*50 =45*50 12 Total cost =+B9+B10+B11 =+C9+C10+C11 =+D9+D10+D11 13 14 b) 15 Balance in service contracts in process account (Waters) =+B12 16 17 c) 18 Actual overhead (Debit) 11000 19 Overhead applied (Credit) =+B11+C11+D11 20 Balance in operating overhead account |=+B18-B19 Debit