The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of??
I can't figure this out.
2007-07-23 12:56:02 · 3 answers · asked by jeffdtelford 2 in Business & Finance ➔ Other - Business & Finance
The amount in WIP is composed of three components - direct materials, direct labor, and overhead. You know the amounts for materials and labor so the remaining portion is overhead. First calculate the overhead amount, the calculate what %of labor that amount is. Therefore:
2,400 - (400+200) - (300+500) = 1,000 of overhead
1,000 overhead divided by the 800 (300+500) of labor is 1.25. So the overhead rate is 125% of direct labor.
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Work in Process Inventory Account?
The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it...
2015-08-19 12:09:03 · answer #4 · answered by Ema 1 · 0⤊ 0⤋