Brunswick Home Remodelers (BHM) uses a job order cost system. The following debits (credits) appeared in Work-in- Process Inventory for April: April 1 For the month For the month For the month For the month Description Balance Direct materials Direct labor Factory overhead To finished goods Amount $ 26,200 156,000 97,800 96,000 (294,500) BHM applies overhead to production at a predetermined rate of 55 percent based on direct materials cost. Job BH-7, which was started during April and is the only job still in process at the end of April, has been charged direct materials of $20,780. Required: How much direct labor cost was charged to Job BH-7 in April?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Brunswick Home Remodelers (BHM) uses a job order cost
system. The following debits (credits) appeared in Work-in-
Process Inventory for April:
April 1
For the month
For the month
For the month
For the month
Description
Balance
Direct materials
Direct labor
Factory overhead
To finished goods
Amount
$ 26,200
156,000
97,800
96,000
(294,500)
BHM applies overhead to production at a predetermined rate of
65 percent based on direct materials cost. Job BH-7, which was
started during April and is the only job still in process at the end
of April, has been charged direct materials of $20,780.
Required:
How much direct labor cost was charged to Job BH-7 in April?
Transcribed Image Text:Brunswick Home Remodelers (BHM) uses a job order cost system. The following debits (credits) appeared in Work-in- Process Inventory for April: April 1 For the month For the month For the month For the month Description Balance Direct materials Direct labor Factory overhead To finished goods Amount $ 26,200 156,000 97,800 96,000 (294,500) BHM applies overhead to production at a predetermined rate of 65 percent based on direct materials cost. Job BH-7, which was started during April and is the only job still in process at the end of April, has been charged direct materials of $20,780. Required: How much direct labor cost was charged to Job BH-7 in April?
Expert Solution
Step 1 Introduction

The overhead is applied to the production on the basis of predetermined overhead rate. The predetermined overhead rate is calculated as estimated overhead cost divided by estimated base activity. 

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