The balance in Work-in-Process Inventory on January 1 was $141,800 at J Company which uses a...

The balance in Work-in-Process Inventory on January 1 was $141,800 at J Company which uses a job order costing system. Direct materials used in January were $174,500. Direct labor used in January was $162,500. Overhead is applied at a rate of 140 percent of direct labor dollars. The following jobs were completed in January: Job #84 had a total cost of $198,780. Job #85 had a total cost of $102,520. Job #86 had a total cost of $119,450. Job #87 had a total cost of $93,150. The only job not finished at the end of January was Job #88 that had $72,400 of material cost to date.

How much overhead had been applied to Job 88?

Expert Solution

Solution:

Beginning WIP	141800
Add: Direct materials	174500
Add: Direct labor	162500
Add: Overhead applied (162500*140%)	227500
Total Manufacturing costs	706300

Total Manufacturing costs	706300
Less: Cost of Completed Jobs
Job #84	-198780
Job #85	-102520
Job #86	-119450
Job #87	-93150
Cost of Ending Work in Process (Job #88)	192400

Cost of Ending Work in Process (Job #88)	192400
Less: Material cost	72400
Dierct labor and Overhead in Job #88	120000

Now,

Overhead applied to Job 88 = $120000*140%/240% = $70,000

ekkarill92 answered 1 year ago

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