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Good Afternoon John,
JK Co makes special assemblies to customers’ ordered and uses job costing.
The data for a period are:
Job Number
AA10
$
Opening WIP : 26800
Materials added in period 17275
Labour for period: 14500Job Number
BB15
$
Opening WIP: 42790
Materials added in period: 0
Labour for period: 3500Job number
CC20
$
Opening WIP: 0
Materials : 18500
Labour: 24600The budgeted overheads for the period were 126,000.
Job number BB15 was completed on the last day of the period.What was the approximate value of closing WIP at the end of the period?
Answer:
AA10 (26800+17275+14500)+(14500/42600 x 126000) = 101462
CC20 (18500 +24600+ 72761) = 115861
Please can you explain where 72761 came from?
Many thanks,
It is the proportion of overheads allocated to CC20.
24,600/42600 x 126,000 = 72,761
Sir but question doesn’t asks us to allocate overheads, shouldn’t we find oar first since overheads are usually based on labour cost/hrs, 126,000/42600?
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