The gross earnings of the factory workers for Larkin Company during the month of January are $90,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.

Instructions

Using the format shown in Illustration 2A.12:

a. Record the factory labor costs for the month of January.

b. Assign factory labor to production

2A.12

Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. The following data concern the three audit jobs conducted during November.

Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $50 per auditor hour. The Waters Inc. job is the only incomplete job at the end of November. The actual overhead for the month was $11,000.

Instructions

a. Determine the cost of each job.

b. Indicate the balance of the Service Contracts in Process account at the end of November.

c. Calculate the ending balance of the Operating Overhead account for November

Transcribed Image Text:

Waters Inc. Renolds Inc. Bayfield Inc. Direct materials $600 $400 $200 Auditor labor costs $5,400 $6,600 $3,375 Auditor hours 72 88 45