A company uses a job order costing system and applies overhead on the basis of direct labor cost. A summary of the company's Work in Process Inventory account for December appears below.Work In Process
DateExplanationPRDebitCreditBalanceDec. 1????73,800Dec.Direct MaterialsG-20235,800?309,600Dec.Direct LaborG-20117,000?426,600Dec.Factory OverheadG-20187,200?613,800Dec.Job No. 5 completedG-8?90,900522,900Dec.Job No. 6 completedG-10?131,400391,500Dec.Job No. 7 completedG-12?73,800317,700Dec. 31Job No. 8 completedG-15?168,300149,400Fill in the blanks for the following:(1) The total cost of the direct materials, direct labor, and factory overhead for jobs still in progress is $________.(2) The company's overhead application rate is ________%(3) Job No. 6 had $26,550 of direct labor cost. Therefore, the job must have had $________ of direct materials cost.(4) Job No. 8 had $73,998 of direct materials cost. Therefore, the job must have had $________ of factory overhead cost.
What will be an ideal response?
(1) $149,400 (ending balance of account)
(2) ($187,200/$117,000) ? 100% = 160%
(3) $26,550 ? 160% = $42,480; $131,400 - $26,550 - $42,480 = $62,370
(4) $168,300 - $73,998 = $94,302 Direct labor + OH; $94,302/2.60 = $36,270
OH = $94,302 - $36,270 = $58,032
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