Grant Marwick and Associates a CPA firm uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November. $668845\begin{array}{lrrr} & \underline{\text { Rondelli }} & \underline{\text { Preston }} & \underline{\text { Lopez }}\\\text { Direct materials }& \$ 900 & \$ 600 & \$ 300 \\\text { Auditor labor costs } & \$ 5,900 & \$ 6,600 & \$ 3,700 \\\text { Auditor hours } &66&88&45\end{array}$

Overhead costs are applied to jobs on the basis of auditor hours and the predetermined overhead rate is $50 per auditor hour. The Rondelli job is the only incomplete job at the end of November. Actual overhead for the month was $10500.
Instructions
(a) Determine the cost of each job.
(b) Indicate the balance of the Work in Process account at the end of November.
(c) Calculate the ending balance of the Manufacturing Overhead account for November.

Question

Grant Marwick and Associates a CPA firm uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during November.

668845\begin{array}{lrrr} & \underline{\text { Rondelli }} & \underline{\text { Preston }} & \underline{\text { Lopez }}\\\text { Direct materials }& \$ 900 & \$ 600 & \$ 300 \\\text { Auditor labor costs } & \$ 5,900 & \$ 6,600 & \$ 3,700 \\\text { Auditor hours } &66&88&45\end{array}

Overhead costs are applied to jobs on the basis of auditor hours and the predetermined overhead rate is $50 per auditor hour. The Rondelli job is the only incomplete job at the end of November. Actual overhead for the month was $10500.
Instructions
(a) Determine the cost of each job.
(b) Indicate the balance of the Work in Process account at the end of November.
(c) Calculate the ending balance of the Manufacturing Overhead account for November.

Nicholas Burton · Accepted Answer

Final Answer :  (a)  Rondelli   Preston   Lopez   Direct materials  $ 900 $ 600 $ 300  Auditor labor costs  5 , 900 6 , 600 3 , 700  Applied overhead  3 , 300 ‾ 4 , 400 ‾ 2 , 250  Total cost  $ 10 , 100 ‾ $ 11 , 600 ‾ ‾ $ 6 , 250 ‾ ‾ \begin{array} { l r r r }  &  	ext { Rondelli }  &  	ext { Preston }  &  	ext { Lopez } \ 	ext { Direct materials }  &  \$ 900  &  \$ 600  &  \$ 300 \ 	ext { Auditor labor costs }  &  5,900  &  6,600  &  3,700 \ 	ext { Applied overhead }  &  \underline { 3,300 }  &  \underline { 4,400 }  &  2,250 \ \quad 	ext { Total cost }  &  \underline { \$ 10,100 }  &  \underline { \underline { \$ 11,600 } }  &  \underline { \underline { \$ 6,250 } } \end{array}  Direct materials   Auditor labor costs   Applied overhead   Total cost  ​  Rondelli  $900 5 , 900 3 , 300 ​ $10 , 100 ​ ​  Preston  $600 6 , 600 4 , 400 ​ $11 , 600 ​ ​ ​  Lopez  $300 3 , 700 2 , 250 $6 , 250 ​ ​ ​ (b) The Rondelli job is the only incomplete job, therefore,   $ 10 , 100 \$ 10,100 $10 , 100 (c)  Actual overhead  $ 10 , 500  (DR)   Applied overhead  9 , 950  (CR)   Balance  $ 550  (DR)  \begin{array}{ll}	ext { Actual overhead }  &  \$ 10,500 	ext { (DR) } \	ext { Applied overhead }  &  9,950 	ext { (CR) } \	ext { Balance }  &  \$ 550 	ext { (DR) }\end{array}  Actual overhead   Applied overhead   Balance  ​ $10 , 500  (DR)  9 , 950  (CR)  $550  (DR)  ​

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