Gorman Company applies overhead cost to jobs on the basis of direct labour cost. Job A, which was started and completed during the current period, shows charges of $6,000 for direct materials, $15,000 for direct labour, and $7,500 for overhead on its job cost sheet. Job B, which is still in process at year-end, shows charges of $2,500 for direct materials and $4,000 for direct labour. Should any overhead cost be added to Job B at year-end? Explain and calculate the amount, if necessary.
Answer to relevant Questions“Predetermined overhead rates smooth product costs.” Do you agree? Why? Define the term cost driver and indicate how it is used in job-order costing. Winder, Knotter, and Nale is a small law firm that has 10 partners and 10 support people. The firm employs a job-order costing system to accumulate costs chargeable to each client, and it is organized into two ...Drew Architectural Design began operations on January 2. The following activity was recorded in the company’s Work in Process account for the first month of operations: Drew Architectural Design is a service firm, so the ...Fryer’s Choice produces a specially blended vegetable oil widely used in restaurant deep fryers. The blending process creates a cooking oil that can be heated to a high temperature, but does not smoke or smell. The oil is ...
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