Question

1. Book It, Inc. uses a predetermined overhead rate of 150% of direct labor based on estimated overhead of $450,000 and estimated direct labor of $300,000. Job 199A incurred $100,000 of direct labor costs. How much overhead should be applied to this job?

2. My Company uses the weighted average method for process cost accounting. My Company had 20,000 units in Beginning Work in Process Inventory. We started 150,000 units this period. Ending Work in Process Inventory has 60,000 units. Calculate the units completed and transferred this period.

Answer 1

1	Calculation of overheads to be applied to this job
	over heads are	$150,000
	Working
	the pre-determined rate is 150% of direct labor, the direct labor is	$100,000
	Over heads are 150% of the $100000	$150,000	$100000 X 150/100
2	Calculation of units completed and transferred
1	Opening work-in progress	20000	units
2	add: included in current period	150000	units
3	Less: closing WIP	-60000	units
4	Units completed and transferred (1+1-3)	110000	(20000+150000-60000)