The Work in Process Inventory Account for Corbett Company for the Month

question 76

Essay

The Work in Process Inventory account for Corbett Company for the month ended June 30 appears below.
$\begin{array}{|c|c|}\hline{\text { Work in Process Inventory }} & \\\hline \text { Beginuing Balance } \quad 0 & \text { Completed } \quad 135,800 \\\hline \text { Direct Materials } \quad\quad 38,200 & \\\hline \text { Direct Labor } \quad\quad\quad 48,000 & \\\hline \text { Overhead } \quad\quad\quad\quad 86,400& \\\hline\end{array}$
Overhead is applied based on direct labor dollars. Direct material costs for the one job remaining in work in process on June 30 was $12,300.
a. What was the overhead rate used to apply overhead to jobs?
b. Determine the amount of direct labor charged to the one remaining job.

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Definitions:

Direct Method

A cash flow statement presentation that lists major classes of gross cash receipts and payments, giving a clear view of actual cash flows.

Cash Flow Statement

A financial report detailing the combined cash inflows from a company's regular operations and investment income, in addition to the cash outflows for funding business endeavors and investments, all within a designated period.

Deferred Tax Liability

A tax obligation that arises when taxable income and accounting income differ, to be paid in future reporting periods.

Amortization

The process of gradually writing off the initial cost of an asset over a period. It's often used in the context of loan repayments or spreading the cost of an intangible asset over its useful life.