Question

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	$12,550
Work-in-Process Inventory	21,340
Finished Goods Inventory	8,900

Work-in-process inventory is made up of three jobs with the following costs:

	Job 114	Job 115	Job 116
Direct materials	$2,436	$2,660	$4,484
Direct labor	1,860	1,480	4,500
Applied overhead	930	740	2,250

During April, Sangvikar experienced the transactions listed below.

1. Materials purchased on account, $28,670.
2. Materials requisitioned: Job 114, $16,270; Job 115, $12,370; and Job 116, $5,000.
3. Job tickets were collected and summarized: Job 114, 160 hours at $11 per hour; Job 115, 220 hours at $14 per hour; and Job 116, 70 hours at $19 per hour.
4. Overhead is applied on the basis of direct labor cost.
5. Actual overhead was $4,280.
6. Job 115 was completed and transferred to the finished goods warehouse.
7. Job 115 was shipped, and the customer was billed for 125 percent of the cost.

Required: (Can you please show detail calculations for solution for the answer)

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 Balance
Job 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. (Can you please show detail calculations for solution for the answer)

$ _________

4. Calculate the cost of goods sold for April. When required, round your answer to the nearest dollar. (Can you please show detail calculations for solution)

$ __________

5. Assuming that Sangvikar prices its jobs at cost plus 25 percent, calculate the price of the one job that was sold during April. Round to the nearest dollar. (Can you please show detail calculations for solution)

$________

Answer 1

1. Calculate the predetermined overhead rate based on direct labor cost.
	Job 114	Job 115	Job 116
Applied overhead	930	740	2,250
Direct labor	1,860	1,480	4,500
Predetermined overhead rate	50%	50%	50%	of direct labor cost
	Ending Balance
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.
	Job 114	Job 115	Job 116
Balance, April 1	$   5,226.00	$   4,880.00	$ 11,234.00
Direct materials	$ 16,270.00	$ 12,370.00	$   5,000.00
Direct labor	$   1,760.00	$   3,080.00	$   1,330.00
Applied overhead	$      880.00	$   1,540.00	$      665.00
Total Ending Balance	$ 24,136.00	$ 21,870.00	$ 18,229.00
3. Calculate the ending balance of Work in Process as of April 30. When required, round your answer to the nearest dollar. (Can you please show detail calculations for solution for the answer)
Ending Work in Process consists of Jobs 114 and 116:
Job 114      (calculated above)	$ 24,136.00
Job 116      (calculated above)	$ 18,229.00
Ending Work in Process	$ 42,365.00
4. Calculate the cost of goods sold for April. When required, round your answer to the nearest dollar. (Can you please show detail calculations for solution)
Cost of goods sold = Job 115 =	$ 21,870.00
5. Assuming that Sangvikar prices its jobs at cost plus 25 percent, calculate the price of the one job that was sold during April. Round to the nearest dollar. (Can you please show detail calculations for solution)
Price of Job 115 = 1.25% x 21870	$ 27,337.50