Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials in October and additional direct labor of $6,500 to finish the job. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October

The amount of job costs added to Work in Process Inventory during October is $37,000

Explanation:

Job A3B was ordered by a customer on September 25.

The company applies overhead at a rate of 200% of the direct labor cost incurred.

Cost of September:

$2,500 of Direct Materials(DM)

$4,000 of Direct Labor(DL)

$4,000 manufactured overhead(OH)

Total job cost = DM + DL + (OH)

Total Job Cost =$2500+$4000+($4000*200%)

Total Job Cost=$2500+$4000+$8000

Total Job Cost=14500 (Cost for September)

Cost of October:

$3,000 of direct materials  

$6,500 of direct labor

$6,500  manufactured overhead

Total job cost = DM + DL + (OH)

Total Job Cost =$3000+$6500+($6500*200%)

Total Job Cost=$3000+$6500+$13000

Total Job Cost=22500 (Cost for October)

Total cost of Job A3B= September $14,500+ October $22,500 = $37,000

Work in process contains the sum of the costs on job cost sheets for jobs that are not yet complete.

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