Leeds Architectural Consultants uses a job-order costing system and applies studio overhead to jobs on the basis of direct staff costs. Because Leeds Architectural Consultants is a service firm, the names of the accounts it uses are different from the names used in manufacturing companies. The following costs were recorded in January:
Cost of subcontracted work (comparable to direct materials) ................................... $230,000
Direct staff costs (comparable to direct labor) ............................................................ $75,000
Studio overhead (comparable to manufacturing overhead cost applied)................... $120,000
Cost of work completed (comparable to cost of goods manufactured)...................... $390,000
There were no beginning inventories in January.
At the end of January, only one job was still in process. This job (Lexington Gardens Project) had been charged with $6,500 in direct staff costs.
Required:
1. Compute the predetermined overhead rate that was used during January.
2. Complete the following job cost sheet for the partially completed Lexington Gardens Project.
Job Cost Sheet
Lexington Gardens Project
Costs of subcontracted work .................................. $ ?
Direct staff costs ....................................................... ?
Studio overhead ........................................................ ?
Total cost to January 31 ......................................... $ ?