Predetermined Overhead Rate, Application of Overhead to Jobs, Job
Cost
On April 1, Sangvikar Company had the following balances in its
inventory accounts:
Materials Inventory$12,840Work-in-Process Inventory21,630Finished
Goods Inventory8,950
Work-in-process inventory is made up of three jobs with the
following costs:
Job 114Job 115Job 116Direct
materials$2,357$2,646$5,126Direct labor1,8401,5404,040Applied
overhead1,0128472,222
During April, Sangvikar experienced the transactions listed
below.
Materials purchased on account, $28,580.
Materials requisitioned: Job 114, $16,080; Job 115,
$12,370; and Job 116, $5,120.
Job tickets were collected and summarized: Job 114,
130 hours at $11 per hour; Job 115, 220 hours at $15 per hour; and
Job 116, 80 hours at $17 per hour.
Overhead is applied on the basis of direct labor
cost.
Actual overhead was $4,585.
Job 115 was completed and transferred to the finished
goods warehouse.
Job 115 was shipped, and the customer was billed for
125 percent of the cost.
Required:
1. Calculate the predetermined overhead rate based on
direct labor cost.
% of direct labor cost
2. Calculate the ending balance for each job as of
April 30. When required, round your answers to the nearest dollar.
Use your rounded answers in subsequent computations, if
necessary.
Ending BalanceJob 114$Job 115$Job 116$
3. Calculate the ending balance of Work in Process as
of April 30. When required, round your answer to the nearest
dollar.
$
4. Calculate the cost of goods sold for April. When
required, round your answer to the nearest dollar.
$
5. Assuming that Sangvikar prices its jobs at cost plus
25 percent, calculate the price of the one job that was sold during
April. When required, round your answer to the nearest
dollar.
$
1) Predetermined Overhead rate = 55%
Job 114 | Job 115 | Job 116 | |
Direct Labor | $ 1,840.00 | $ 1,540.00 | $ 4,040.00 |
Overhead | $ 1,012.00 | $ 847.00 | $ 2,222.00 |
Rate | 55% | 55% | 55% |
2)
Job 114 | Job 115 | Job 116 | |
Direct Materials | $ 18,437.00 | $ 15,016.00 | $ 10,246.00 |
Direct Labor | $ 3,270.00 | $ 4,840.00 | $ 5,400.00 |
Overhead | $ 1,799.00 | $ 2,662.00 | $ 2,970.00 |
Total | 23,506.00 | $ 22,518.00 | $ 18,616.00 |
3)23,506 + 18,616 = 42,122
4)22,518
5)22,518 x 125% = 28,148
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Predetermined Overhead Rate,
Application of Overhead to Jobs, Job Cost On April 1, Sangvikar
Company had the following balances in its inventory accounts:
Materials Inventory $12,970 Work-in-Process Inventory 21,510
Finished Goods Inventory 8,680
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8.
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