Please help me wih both questions. Please show work to get credit. 1 . Kelson Co
ID: 2380100 • Letter: P
Question
Please help me wih both questions. Please show work to get credit.
1 . Kelson Company applies overhead to jobs on the basis of 60% of direct labor cost. If Job 201 shows $27,000 of manufacturing overhead applied, the direct labor cost on the job was:
Inventories:
Beginning
Ending
Raw materials
$32,000
$38,000
Work in process
$11,000
$17,000
Finished goods
$45,000
$47,000
Additional information:
Raw materials purchases
$65,000
Direct labor cost
$88,000
Manufacturing overhead cost incurred
$64,000
Indirect materials included in manufacturing overhead cost incurred
$3,000
Manufacturing overhead cost applied to Work in Process
$61,000
$16,200 $27,000 $37,800 $45,000Explanation / Answer
Q 1) $27,000 x 100/ 60 = $45000
Q2)
Particulars Amount Amount Opening Stock of Raw Material 32000 Add: Purchase of Raw materials 65000 Less: Closing stock of Raw Materials 38000 Raw Materials Consumed 59000 Direct Wages (Labour) $88,000 Prime cost (1) $147,000 Add :- Factory Over Heads: $61,000 Works cost Incurred $208,000 Add: Opening Stock of WIP 11000 Less: Closing Stock of WIP 17000 -6000 Works cost (2) $202,000 Add: Opening stock of Finished Goods 45000 Less: Closing stock of Finished Goods 47000 -2000 Cost of Goods Sold $200,000