Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost On April 1, Sangvikar Company had the following balances in its inventory accounts: Materials Inventory $13,000 Work-in-Process Inventory 21,060 Finished Goods Inventory 8,800 Work-in-process inventory is made up of three jobs with the following costs: Job 114 Job 115 Job 116 Direct materials $2,395 $2,632 $4,408 Direct labor 1,740 1,540 4,220 Applied overhead 957 847 2,321 During April, Sangvikar experienced the transactions listed below. Materials purchased on account, $29,010. Materials requisitioned: Job 114, $16,090; Job 115, $12,570; and Job 116, $5,140. Job tickets were collected and summarized: Job 114, 140 hours at $11 per hour; Job 115, 220 hours at $15 per hour; and Job 116, 70 hours at $19 per hour. Overhead is applied on the basis of direct labor cost. Actual overhead was $4,245. Job 115 was completed and transferred to the finished goods warehouse. Job 115 was shipped, and the customer was billed for 125 percent of the cost. Required: 1. Calculate the predetermined overhead rate based on direct labor cost. fill in the blank 1 % of direct labor cost 2. Calculate the ending balance for each job as of April 30. When required, round your answers to the nearest dollar. Use your rounded answers in subsequent computations, if necessary. Ending Balance Job 114 $fill in the blank 2 Job 115 $fill in the blank 3 Job 116 $fill in the blank 4 3. Calculate the ending balance of Work in Process as of April 30. When required, round your answer to the nearest dollar. $fill in the blank 5 4. Calculate the cost of goods sold for April. When required, round your answer to the nearest dollar. $fill in the blank 6 5. Assuming that Sangvikar prices its jobs at cost plus 25 percent, calculate the price of the one job that was sold during April. When required, round your answer to the nearest dollar. $fill in the blank 7
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.
Predetermined
On April 1, Sangvikar Company had the following balances in its inventory accounts:
| Materials Inventory | $13,000 |
| Work-in-Process Inventory | 21,060 |
| Finished Goods Inventory | 8,800 |
Work-in-process inventory is made up of three jobs with the following costs:
| Job 114 | Job 115 | Job 116 | |
| Direct materials | $2,395 | $2,632 | $4,408 |
| Direct labor | 1,740 | 1,540 | 4,220 |
| Applied overhead | 957 | 847 | 2,321 |
During April, Sangvikar experienced the transactions listed below.
- Materials purchased on account, $29,010.
- Materials requisitioned: Job 114, $16,090; Job 115, $12,570; and Job 116, $5,140.
- Job tickets were collected and summarized: Job 114, 140 hours at $11 per hour; Job 115, 220 hours at $15 per hour; and Job 116, 70 hours at $19 per hour.
- Overhead is applied on the basis of direct labor cost.
- Actual overhead was $4,245.
- Job 115 was completed and transferred to the finished goods warehouse.
- Job 115 was shipped, and the customer was billed for 125 percent of the cost.
Required:
1. Calculate the predetermined overhead rate based on direct labor cost.
fill in the blank 1 % of direct labor cost
2. Calculate the ending balance for each job as of April 30. When required, round your answers to the nearest dollar. Use your rounded answers in subsequent computations, if necessary.
| Ending Balance | |
| Job 114 | $fill in the blank 2 |
| Job 115 | $fill in the blank 3 |
| Job 116 | $fill in the blank 4 |
3. Calculate the ending balance of Work in Process as of April 30. When required, round your answer to the nearest dollar.
$fill in the blank 5
4. Calculate the cost of goods sold for April. When required, round your answer to the nearest dollar.
$fill in the blank 6
5. Assuming that Sangvikar prices its jobs at cost plus 25 percent, calculate the price of the one job that was sold during April. When required, round your answer to the nearest dollar.
$fill in the blank 7
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