Question

Applying Overhead to Jobs, Costing Jobs Brebeur Company builds internal conveyor equipment to dient specifications. On October 1, Job 877 was in process with a cost of $29,900 to date. During October, Jobs 878, 879, and 880 were started. Data on costs added during October for all jobs are as follows: Job 877 Job 878 Job 879 Job 880 Direct materials $23,200 $34,000 $16,400 $7,100 Direct labour 15,200 90,000 1,300 33,500 Overhead is applied to production at the rate of 70% of direct labour cost. Job 877 was completed on October 28, and the client was billed at cost plus 40%. All other jobs remained in process. Required: 1. Prepare a brief job-order cost sheet showing the October 1 balances of all four jobs, plus the direct materials and direct labour costs during October (Note: There is no need to calculate applied overhead at this point or to total the costs.) If an amount box does not require an entry, enter zero ("0"). Brebeuf Company Job-Order Cost Sheet For the Month of October Job 877 ob 878 ob 879 Job 880 Beginning balance Direct materials Direct labour 2. Calculate the overhead applied to each job during October Job 877 Job 878 Job 879 Job 880 3. Calculate the balance in Work in Process on October 31. If an amount box does not require an entry, leave it blank or enter zero ("0"). Job 877 Job 878 Job 879 Job 380 4. What is the price of Job 8777

Answer 1

1.

Brebuef Company Job-Order Cost Sheet For the Month of October
	Job 877	Job 878	Job 879	Job 880
Beginning balance	$29,900	-	-	-
Direct materials	$23,200	$34,000	$16,400	$7,100
Direct labor	$15,200	$90,000	$1,300	$33,500

2.Calculation of overhead applied :

Job 877	$10,640*
Job 878	$63,000
Job 879	$910
Job 880	$23,450

*Overhead = direct labor cost X 70% ==> $15,200 X 70% = $10,640. Same formula applied for all other jobs.

3. Calculation of balance work in process on October 31 :

Job 877	-
Job 878	$187,000*
Job 879	$18,610*
Job 880	$64,050*
Total	$269,660

* ---> For Job 877 there is no work in process because it was sold.

---> For job 878 work in process is $187,000($34,000+90,000+63,000)

---> For job 879 work in process is $18,610($16,400+1,300+910)

---> For job 880 work in process is $64,050($7,100+33,500+23,450)

4. Calculation of the price of Job 877 :

---> Total cost of Job 877 = $78,940 ($29,900+23,200+15,200+10,640)

Given that client was billed at cost plus 40% ==> Price = Cost X 140% = $78,940 X 140% = $110,516