Job Costing

Elegances Interior Design Ltd uses a job order cost accounting system and applies the overhead

on the basis of direct labour cost.

At the beginning of the year, Elegance estimated the following:

Overhead $270,000

Direct labour cost $900,000

Direct labour hours 150,000 hours

Three jobs were worked on during the current period.

Table A shows the cost information of the jobs.

Table A

Job Material Requisitions Time Ticket

911 $68,000 $78,000

912 $63,000 $81,000

913 $46,750 $34,000

At the end of the period, Job 912 and Job 913 have been completed, out of which Job 912 was

sold. Due to the last minute change in customer's specification, Job 911 was still in process.

Overhead incurred for the period was $61,000.

Required:

Refer to Image

Elegance Interior Design Lid uses a job order cost accounting system and applies the overhead on the basis of direct labour cost. At the beginning of the year, Elegance estimated the following: Overhead $270,000 Direct labour cost $900,000 Direct labour hours 150,000 hours Three jobs were worked on during the current period. Table A shows the cost information of the jobs. Table A Job Material Requisitions Time Ticket 911 $68,000 $78,000 912 $63,000 $81,000 913 $46,750 $34,000 At the end of the period, Job 912 and Job 913 have been completed, out of which Job 912 was sold. Due to the last minute change in customer's specification, Job 911 was still in process. Overhead incurred for the period was $61,000. Required: (@) Complete the job cost sheets for each job using the format shown in Table B Table B Job No. Material Labour Overhead Total cost Status In process or finished or sold (15 marks) (b) Identify the amounts of each of the following accounts at the end of the period. Work in Process Finished Goods 111 Cost of Goods Sold ( 3 marks) o Compute the overhead variance and explain how this variance will be treated in the accounts. No journal entries required. ( 7 marks)