Question
Market Pulse performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups to
Market Pulse performs market research for consumer product companies across the country. The company conducts telephone surveys and gathers consumers together in focus groups to review foods, cleaning products, and toiletries. Market Pulse uses a normal-costing system with one direct-cost pool, labor, and one indirect-cost pool, general overhead. General overhead is allocated to each job based on 150% of direct labor cost. Actual overhead equaled allocated overhead as of April 30, 2017. Actual overhead in May was $122,000.
All costs incurred during the planning stage for a market research job and during the job are gathered in a balance sheet account called "Jobs in Progress (JIP)." When a job is completed, the costs are transferred to an income statement account called "Cost of Completed Jobs (CCJ)."
From Beginning JIP
Incurred in May
General
Overhead
Band
Labor
Allocated
Labor
Cococrunch Candy Bars
$18,000
$27,000
$16,000
Brite Toothpaste
4,000
6,000
34,000
Verde Organic Salsa
-
-
22,400
Sparkle Dish Liquid
-
-
5,600
As of May 1, there were two jobs in progress: Cococrunch Candy Bars, and Brite Toothpaste. The jobs for Verde Organic Salsa and sparkle Dish Liquid were started during May. The jobs for Cococrunch Candy Bars and Sparkle Dish Liquid were completed during May.
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