Help !!!! :(

@uaemail12 said:
Can any one help me …..

A manufacturer absorbs production overheads into the cost of jobs as a percentage of actual direct labour cost. Two jobs were worked on during a period:

Job 1 ($)
Job 2 ($)
Opening work-in-progress
5,269
–
Direct materials in the period
10,726
4,652
Direct labour in the period
4,360
2,940

Production overheads of $9,855 were incurred in the period. Job 2 was completed in the period.
What is the value of work-in-progress at the end of the period?
___________________________________________________________________________________________

Job2 is completed, so it isn’t part of ending WIP. Basically you now have to find out total production cost of Job1. (Plus Opening WIP for Job1)

Opening WIP + DM (Direct Material) + DL (Direct Labour) + POH (Production Overheads) <—- All for Job1

DM and DL is given. For POH, you gotta apportion it.
It says that basis of apportionment for POH is DL cost.

So:
(Total POH)/(Total DL costs for Job1 and Job2)*(DL Cost for Job1)
ie 9855/(4360+2940)*4360 = $5886

Now add up Opening WIP, DM, DL and this value for POH for Job1 to get Closing WIP.
Total will be: $26,241, I think. Hope this makes sense, yeah?

@uaemail12 said:

The following indirect costs were incurred in a factory in a period:

Production labour costs incurred during a period included the following items:

$
Salary of factory manager
2,400
Training of direct workers
1,660
Normal idle time
840
Overtime premiums of direct workers
2,760
Overtime hours of direct workers at basic rate
9,200
What total amount would usually be charged to production overhead for the above items?_________________________________________________________________

Here, remember that all DIRECT COSTS are charged to Prime Costs ie to the WIP, while all INDIRECT COSTS are charged to the Production Overheads.

For this q., just identify the indirect (labour) costs and here, all of the above ARE indirect costs, except the last one.

Let’s walk-through why the indirect costs are… well, indirect.
Quick Revision: IDL costs are all the wages/salaries paid to ppl who aren’t directly involved in the production in factories. Think: all general ‘intellectual’ work done like supervision, management, training, instructions etc.
And so DL costs are wages/salaries paid to ppl who do the ‘physical’ work, like assembly, cutting stuff, polishing wood, operating machines bla bla.

Salary of factory manager – The managers are dudes who aren’t directly involved in the manufacture process. Verdict: IDL cost

Training of direct workers – Again, do the trainers actually assemble the goods or polish them or really get down to working on the product? Um no. Verdict: IDL cost

Normal idle time – All idle hours worked are IDL costs, period.

Overtime premiums of direct workers – IDL cost. Hopefully you know this bit.

Overtime hours of direct workers at basic rate – DL cost. (For direct workers, overtime OT basic is always direct, while OT premium is indirect)

In the end, just add up the IDL costs, you get the total IDL costs, which are to be charged to the POHs.