Alpha Company applies overhead costs to jobs on the basis of
direct labor costs, Job A, which
was started and completed during the current period, shows charges
of $10,000 for direct
materials, $16,000 for direct labor, and $12,000 for overhead on
its job cost sheet. Job B, which
was still in process at year end, shows charges of $5,000 for
direct materials and $8,000 for
direct labor.
Required:
1. (5 pts.) Should any overhead cost be applied to Job B at year
end? If so, how much? Explain
briefly.
2. (5 pts.) How will the costs included in Job B’s job cost
sheet be reported within Alpha
Company’s financial statements at year end?
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