Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work
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Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following.
Work in Process Inventory | |||||||||
Date | Explanation | Debit | Credit | Balance | |||||
Dec. | 31 | Direct materials cost | 1,700,000 | 1,700,000 | |||||
31 | Direct labor cost | 250,000 | 1,950,000 | ||||||
31 | Overhead applied | 782,000 | 2,732,000 | ||||||
31 | To finished goods | 2,653,000 | 79,000 | ||||||
1. Determine the predetermined overhead rate used (based on direct materials cost).
2. Only one job remained in work in process inventory at December 31. Its direct materials cost is $26,000. How much direct labor cost and overhead cost are assigned to this job?
Only one job remained in work in process inventory at December 31. Its direct materials cost is $26,000. How much direct labor cost and overhead cost are assigned to this job?
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Determine the predetermined overhead rate used (based on direct materials cost).
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