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FULL SCREEN PRINTER VERSION ‘BACK and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit Jobs in process at the beginning of Don November. Listed below are data concerning the three audit jobs conducted during November. $710 $230 $6,000$7,000$4,075 48 $440 Auditor hours 78 93 rate is $55 per auditor hour. The Lynn job is the orly incomplete job at the end of November. Actual overhead for the month was $12,800. (a) Determine the cost of each job. Lynn Brian (b) Indicate the balance of the Service Contracts in Process account at the end of November Balance in service contracts in process account (c) Calculate the ending balance of the Operating Overhead account for November Balance in operating overhead account version 4,241 23
Expert Answer
a.) determination of cost of each job.
| Cost | |
| LYNN [710 + 6,000 +78*(55)] | $11,000 |
| BRIAN [440 +7,000 +93* (55)] | $12,555 |
| MIKE [230 +4075 +48*(55)] | $6,945 |
b.balance in service contracts in process account
=>$11,000.
(since Lynn’s is the only job incomplete, its cost will appear as service contracts in process account).
C.ending balance of operating overhead account.
$755.
balance in operating overhead account = actual overhead – applied overhead
here,
actual overhead = $12,800.
applied overhead = (78 + 93 +48 )*$55 =>$12,045……(total audit hours * hourly rate)
=> balance in operating overead account = $12,800 -$12,045.=>$755.
