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The following information relates to questions 10.4 and 10.5.
A firm makes special assemblies to customers’ orders and uses job costing.
The data for a period are:
Job number Job number Job number
AA10 BB15 CC20
$ $ $
Opening WIP 26,800 42,790 0
Material added in period 17,275 0 18,500
Labour for period 14,500 3,500 24,600
The budgeted overheads for the period were $126,000.
Job number BB15 was completed on the last day of the period.10.4 What overhead should be added to job number CC20 for the period?
A $65,157
B $69,290
C $72,761
D $126,000 (2 marks)10.5 What was the approximate value of closing work-in-progress at the end of the period?
A $58,575
B $101,675
C $217,323
D $227,675CAN U PLEASE EXPLAIN 10.5 how do i calculate the closing WIP?
thx for the help:)BB15 has been finished, and so the closing WIP is that in both AA10 and CC20.
In both cases it is the opening WIP plus the material added plus the labour plus the overheads.
The material added and the labour for each of the two jobs is given, but the overheads of $126,000 need to be apportioned between the three products.
The total labour cost is 14,500 + 3,500 + 24,600 = 42,600, and therefore the overheads will be apportioned on this basis. The total given to AA10 will therefore be 14,500/42,600 x 126,000 = 42,887.
Therefore the total closing WIP for AA10 = 26,800 + 17,275 + 14,500 + 42,887 = 101,462.The closing WIP for CC20 is calculated in the same way 🙂
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