Reference: 03-12
Jimbob Co. had the following inventory balances at the beginning and end of April: $$\begin{array} { | l | l | l | }
\hline & \text { April 1 } & \text { April } 30 \
\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \
\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \
\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \
\hline
\end{array}$$ During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.
-The amount of direct labour cost in the April 30 Work in Process inventory was:
A)$3,300.
B)$2,800.
C)$6,300.
D)$3,500.

Question

Reference: 03-12
Jimbob Co. had the following inventory balances at the beginning and end of April: $$\begin{array} { | l | l | l | } 
\hline & \text { April 1 } & \text { April } 30 \
\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \
\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \
\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \
\hline
\end{array}$$ During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.
-The amount of direct labour cost in the April 30 Work in Process inventory was:
A)$3,300.
B)$2,800.
C)$6,300.
D)$3,500.

Quizplus · Accepted Answer

The direct labour cost in the April 30 Work in Process inventory can be calculated by multiplying the direct labour rate by the number of hours worked. The direct labour rate is $20 per hour. The question does not specify the number of hours worked on the jobs in the ending Work in Process inventory, but it does provide the cost of direct materials in the ending inventory ($4,700) and the predetermined overhead rate (80 cents per direct labour dollar). Since the overhead applied is based on direct labour dollars, we can infer the direct labour cost by reversing the overhead application process. However, without the specific hours worked on the ending inventory, we cannot directly calculate the direct labour cost from the information given. The correct answer involves understanding the relationship between direct labour cost and applied overhead, but the question does not provide enough specific details about the hours worked on the ending inventory to calculate it directly from the given information. Therefore, the correct answer is derived from an understanding of the cost accounting principles rather than a straightforward calculation from the provided data.

Reference: 03-12 Jimbob Co During April, $36,000 in Raw Materials (All Direct Materials) Were

Reference: 03-12
Jimbob Co During April, $36,000 in Raw Materials (All Direct Materials) Were