Assignment #4 (A)
Williams Company.
Williams Company uses a job-order costing system and the following information is available from its
records. The company has three jobs in process: #6, #9, and #13.
Raw material used $120,000
Direct labor per hour $8.50
Overhead applied based on direct labor cost 120%
Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25
percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500;
3,100; and 4,200; respectively. Indirect labor is $33,000. Other actual overhead costs totaled $36,000.
• Refer to Williams Company. What is the prime cost of Job #6?
a. $42,250
b. $57,250
c. $73,250
d. $82,750
• Refer to Williams Company. What is the total amount of overhead applied to Job #9?
a. $18,250
b. $26,350
c. $30,000
d. $31,620
• Refer to Williams Company. What is the total amount of actual overhead?
a. $36,000
b. $69,000
c. $93,000
d. $99,960
• Refer to Williams Company. How much overhead is applied to Work in Process?
a. $ 69,000
b. $ 99,960
c. $132,960
d. $144,000
• Refer to Williams Company. If Job #13 is completed and transferred, what is the balance in Work in
Process Inventory at the end of the period if overhead is applied at the end of the period?
a. $ 96,700
b. $ 99,020
c. $139,540
d. $170,720
• Refer to Williams Company. Assume the balance in Work in Process Inventory was $18,500 on June 1
and $25,297 on June 30. The balance on June 30 represents one job that contains direct material of
$11,250. How many direct labor hours have been worked on this job (rounded to the nearest hour)?
a. 751
b. 1,324
c. 1,653
d. 2,976
Sigma Company
The following information pertains to Sigma Company for September:
Direct Material Direct Labor Overhead
Job #323 $3,200 $4,500 ?
Job #325 ? 5,000 ?
Job #401 5,670 ? $5,550
Sigma Company applies overhead for Job #323 at 140 percent of direct labor cost and at 150 percent of
direct labor cost for Jobs #325 and #401. The total cost of Jobs #323 and #325 is identical.
• Refer to Sigma Co. What amount of overhead is applied to Job #323?
a. $4,800
b. $5,550
c. $6,300
d. $7,500
• Refer to Sigma Co. What amount of overhead is applied to Job #325?
a. $8,325
b. $7,500
c. $7,000
d. $5,000
• Refer to Sigma Co. What is the amount of direct materials for Job #325?
a. $1,950
b. $1,500
c. $3,700
d. $7,500
• Refer to Sigma Co. Assume that Jobs #323 and #401 are incomplete at the end of September. What is the
balance in Work in Process Inventory at that time?
a. $18,920
b. $22,620
c. $28,920
d. $30,120
ANSWER:
Williams Company
1.
Direct Materials (P120,000 x 30%) P36,000
Direct Labor (2,500 hrs x P8.50) 21,250
Total Prime Costs of Job #6 = P57,250
2.
Direct Labor Hours 3,100
Direct Labor Rate P8.50
OH Application Rate 120%
(3,100 x 8.50 x 1.2)
Total overhead applied to Job #9 = P31,620
3.
Indirect Materials (P120,000 x 20%) P 24,000
Indirect Labor 33,000
Other Overhead Costs 36,000
(24,000 + 33,000 + 36,000)
Total amount of actual overhead = P 93,000
4.
Direct labor hrs
job #6 = 2,500
job #9 = 3,100
job #1 = 4,200
9,800 x 8.50 = 83,300
83,300 x 120%
Total Overhead applied = P99,960
5.
DM: P120,000 x .30 = 36,000
DL: 2,500 x 8.50 = 21,250
FOH: 21,250 x 120% = 25,500
Total cost of Job #6 = 82,750
DM: P120,000 x .25 = 30,000
DL: 3,100 x 8.50 = 26,350
FOH: 26,350 x 120% = 31,620
Total Cost of Job #9 = 87,970
(82,750 + 87,970) = P170,720
6.
P6,385 ÷ 8.50
= 751 hours
Sigma Co.
7.
4,500 x 1.4
Total Overhead = P6,300
8.
5,000 x 1.5
Total Overhead = P7,500
9.
Job 323: 6,300
Job 325: 7,500
DM: 3,200
DL: 4,500
FOH: 6,300
Total: 14,000
(14,000 - (5,000 + 7,500)
= 1,500
10.
P5,550 ÷ 150% = 3,700
DM: 5,670
DL: 3,700
FOH: 5,550
= Total: 14,920
DM: 3,200
DL: 4,500
FOH: 6,300
= Total: 14,000
(14,920 + 14,000)
= 28,920
