Question

Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $6,300 for direct materials, $8,500 for direct labor, and $6,205 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $2,700 for direct materials and $4,400 for direct labor.

Required:
Calculate the overhead cost be added to Job W at year-end

Answer 1

Overhead= $3,212

Step-by-step explanation:

Giving the following information:

Sigma Corporation applies overhead costs to jobs based on direct labor cost.

Job W, which is still in process at year-end, shows charges of $2,700 for direct materials and $4,400 for direct labor.

Job V:

$6,300 for direct materials.

$8,500 for direct labor.

$6,205 for overhead on its job cost sheet.

First, we need to calculate the overhead rate.

Overhead rate= 6205/8500= $0.73 per direct labor dollar

Job W:

Direct labor= 4,400

Overhead= 4,400*0.73= $3,212