Question

ABC Company began operations during 2022 and employs a
job-order costing system with departmental overhead
rates. Overhead from both Department A and Department B
is assigned to jobs on the basis of direct labor hours.
Below is a summary of events and transactions that
occurred during 2022:

a.  ABC Company had the following estimates for 2022:

                        Dept. A      Dept. B       Total
Overhead cost           $136,500     $192,000     $328,500
Direct labor hours        14,000       16,000       30,000

b.  ABC Company began work on three jobs. Information
    about these three jobs appears below:

                             Job #1      Job #2      Job #3
Direct materials used      $ 71,400    $122,000    $103,000
Direct labor cost          $117,600    $ 93,600    $100,800       
DL hours in Dept. A           5,200       3,600       3,200
DL hours in Dept. B           4,600       4,200       5,200  

c.  Job #1 and Job #3 were completed during 2022. Job #2
    was not completed. In addition, Job #1 was sold during
    2022 whereas Job #3 was not sold.

d.  When Job #1 was sold to the customer, ABC Company charged
    the customer 150% of the total cost to manufacture Job #1.

Calculate ABC Company's work in process inventory balance at
December 31, 2022.

Calculate the total selling price charged to the customer for
Job #1.

Answer 1

OH rate
			Deptt A	Deptt B
Overheads cost		136500	192000
Divide Total DLH		14000	16000
OH rate per DLH		9.75	12
			Job 1	Job 2	Job 3
Direct material cost		71400	122000	103000
Direct labour cost		117600	93600	100800
Overheads applied
Deptt A(@ 9.75 per DLH)	50700	35100	31200
Depttt B (@12 per DLH)	55200	50400	62400
Total cost			294900	301100	297400
Total cost of Job 1		294900
Add: Mrkup @50%		147450
Selling price charged for Job 1	442350