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 $18,540 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	$14,430	$5,910	$3,580	$1,820
Direct labor	14,000	8,900	1,800	2,000

Overhead is applied to production at the rate of 80% 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?

3
4

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	direct labor
4	direct materials