Garst Manufacturing is working on two jobs. Cost is accumulated under a job-order costing system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period: (a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II. (b) Labor costs for the two jobs amounted to the following: Project 1, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours). (c) Project II was sold during the period for $120,000. The ending balance in Work i Process was: Multiple Choice O O O $34,000. $0. $46,800. $136,000. x

Garst Manufacturing is working on two jobs. Cost is accumulated under a job-order costing system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period: (a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II. (b) Labor costs for the two jobs amounted to the following: Project 1, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours). (c) Project II was sold during the period for $120,000. The ending balance in Work i Process was: Multiple Choice O O O $34,000. $0. $46,800. $136,000. x

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Description: Garst Manufacturing is working on two jobs. Cost is accumulated under a job-order costing system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $64,000 and 10,000 direct labor hourswould be

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 11PA: When setting its predetermined overhead application race, Tasty Box Meals estimated its overhead...

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Concept explainers

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure. 

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.

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Question

Garst Manufacturing is working on two jobs. Cost is accumulated under a job-order costing system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $64,000 and 10,000 direct labor hours
would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period:
(a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.
(b) Labor costs for the two jobs amounted to the following: Project I, $24,000 (2,000 hours); Project II, $44,000 (6,000 hours).
(c) Project II was sold during the period for $120,000.
The ending balance in Work in Process was:
Multiple Choice
X
$34,000.
$0.
$46,800.
$136,000.

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