A Company Uses a Job Order Costing System and Applies

question 46

Essay

A company uses a job order costing system and applies overhead on the basis of direct labor cost. A summary of the company's Work in Process Inventory account for December appears below.
Work In Process


Fill in the blanks for the following:

(1) The total cost of the direct materials, direct labor, and factory overhead for jobs still in progress is $________.
(2) The company's overhead application rate is ________%
(3) Job No. 6 had $26,550 of direct labor cost. Therefore, the job must have had $________ of direct materials cost.
(4) Job No. 8 had $73,998 of direct materials cost. Therefore, the job must have had $________ of factory overhead cost.

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Definitions:

Accounting Principles

Fundamental guidelines or rules that underpin the process of accounting, including concepts like the matching principle, revenue recognition, and historical cost.

Short-term Creditors

Lenders or entities from whom a company has borrowed money or resources that are to be repaid within one year.

Liquidity

The ability of an asset to be quickly converted into cash or an entity's capacity to meet its immediate and short-term obligations.

Unusual Items

Non-recurring or uncommon transactions that are outside the usual business operation, which might distort the financial statements if not separately disclosed.