Question

Job-Order Costing Variables

On July 1, Job 46 had a beginning balance of $710. During July, prime costs added to the job totaled $600. Of that amount, direct materials were three times as much as direct labor. The ending balance of the job was $1,600.

Required:

1. What was overhead applied to the job during July?
$

2. What was direct materials for Job 46 for July? Direct labor? If rounding is required, round your answers to the nearest cent.

Direct labor	$
Direct materials	$

3. Assuming that overhead is applied on the basis of direct labor cost, what is the overhead rate for the company? Round your answer to the nearest whole percent.
%

Answer 1

req 1.
Overheads applied to Job:
Ending balance of job				1600
Less: Beginning balance of Job			710
Total Manufacturing cost incurred during the period	890
Less: Prime cost incurred			600
Overheads applied to Job:			290
Req 2.
Let the direct labour cost incurred for job be 'x'
Therefore, the direct material cost incurred be 3x
Prime cost incurred = Direct material cost + Direct labour cost
600 = 3x + x
Direct Labour cost (x)= $ 150
Direct Material cost (3*150): $ 450
Req3.
Overheads rate as % of DLC:
Overheads applied		290
Divide: Direct labour cost	150
Overheads rate as % of DLC:	193.00%