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A firm uses job costing. Details of the three jobs worked on during a period are:
Jb Ba Jb Dc Jbfe
$ $ $
OWIP 22760 3190 —
Direct material 4620 11,660 14335
Direct labor 12,125 10,520 7695Overheads are absorbed at 40% of prime cost in each period . Jobs Dc and Job Fe remained incomplete at the end of the period .
What is the value of the closing work in progress?
Kaplan: answer is $65,084 but the working not understood at all.
The prime cost for those jobs this period is 11,660 + 10,520 + 14,335 + 7,695 = 44,210
Overheads are 40% x 44,210 = 17,684So total value at the end of the period = 3,190 + 44,210 + 17,684 = 65,084
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