Question

Alpha Company applies overhead costs to jobs on the basis of direct labor costs, Job A,...

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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