Question

The Oxford Company uses a job order cost system and applies factory overhead to jobs on the basis of direct labor cost. During the month of July, the following activities took place in the work-in-process account:

Beginning $15,000
Direct materials 10,000
Direct labor 30,000
Overhead applied 15,000
  
At the end of July, only one job (Job #15), was still in process. This job has been charged with $2,000 of direct materials cost.
Required:
Determine the amount of direct labor cost incurred and overhead applied in the ending inventory of work-in-process on July 31.

Answer 1

See below

Step-by-step explanation:

The amount of direct labor cost incurred is computed as;

= $30,000/$70,000 × $2,000

= $857

Overhead applied in ending working in the ending inventory of work in process on July 31

= $15,000/$70,000 × $2,000

= $429