Question:
A service firm uses a job-order costing system and applies office overhead to jobs on the basis of direct staff costs. The following costs were recorded in January:
Cost of subcontracted work (comparable to direct material)----300,000
Direct staff costs----100,000
Office overhead (comparable to manufacturing overhead applied)--160,000
Cost of work completed (comparable to cost of goods manufactured)---520,000
There were no beginning inventories in January. At the end of January, only one job was still in progress. This job (Marble Slab Tombstones) had been charged with $9,000 in direct staff costs.
Required:
1] Compute the predetermined overhead rate that was used in January.
2] Compute the following job cost sheet for the partially completed Marble Slab Tombstones project;
Job Cost Sheet
Marble Slab Tombstones Project
Cost of subcontracted work .
Direct staff costs .
Office overhead applied .
Total costs to January 31 .