Applying Overhead to Jobs, Costing Jobs

Gorman Company builds internal conveyor equipment to client specifications. On October 1, Job 877 was in process with a cost of $18,660 to date.

During October, Jobs 878, 879, and 880 were started. Data on costs added during October for all jobs are as follows:

	Job 877	Job 878	Job 879	Job 880
Direct materials	$14,460	$6,020	$3,420	$1,720
Direct labor	15,000	8,700	1,600	1,800

Overhead is applied to production at the rate of 60% of direct labor cost. Job 877 was completed on October 28, and the client was billed at cost plus 50%. All other jobs remained in process.

	Required:
1.	Prepare a brief job-order cost sheet showing the October 1 balances of all four jobs, plus the direct materials and direct labor costs during October. There is no need to calculate applied overhead at this point or to total the costs.
2.	Calculate the overhead applied to each job during October.
3.	Calculate the balance in Work in Process on October 31.
4.	What is the price of Job 877?

Refer to the list below for the exact wording of text items within your job-order cost sheets.

Amount Descriptions
Beginning balance
Direct labor
Direct materials

1. Prepare a brief job-order cost sheet showing the October 1 balances of all four jobs, plus the direct materials and direct labor costs during October. There is no need to calculate applied overhead at this point or to total the costs. Refer to Amount Descriptions for the exact wording of text items within your job-order cost sheets. All amount cells must have an entry; enter zeros as needed.

Gorman Company

Job-Order Cost Sheets

For the Month of October

1		Job 877	Job 878	Job 879	Job 880
2	Beginning balance
3
4

2. Calculate the overhead applied to each job during October.

The overhead applied to Job 877 is .

The overhead applied to Job 878 is .

The overhead applied to Job 879 is .

The overhead applied to Job 880 is .

3. Calculate the balance in Work in Process on October 31.

The balance in Work in Process for Job 878 is .

The balance in Work in Process for Job 879 is .

The balance in Work in Process for Job 880 is .

The total balance in Work in Process is .

4. What is the price of Job 877?

The price of Job 877 is .