Exercise 2-10 Applying Overhead Cost to a Job [LO2-2]

Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $6,100 for direct materials, $9,600 for direct labor, and $6,432 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $3,200 for direct materials and $5,900 for direct labor.

Required:

1a. Should any overhead cost be applied to Job W at year-end?

Yes

No

1b. How much overhead cost should be applied to Job W?

Overhead cost?

2. How will the costs included in Job Ws job cost sheet be reported within Sigma Corporations financial statements at the end of the year?

Raw Materials

Work-in-Process

Finished Goods

please explain all the steps