Webb Company. Webb Company uses a job-order costing system and the following information is available from its records.The company has three jobs in process: #6,#9,and #13.
Direct material was requisitioned as follows for each job respectively: 30 percent,25 percent,and 25 percent; the balance of the requisitions was considered indirect.Direct labor hours per job are 2,500; 3,100; and 4,200; respectively.Indirect labor is $33,000.Other actual overhead costs totaled $36,000.
Refer to Webb Company.How much overhead is applied to Work in Process?

Question

Webb Company. Webb Company uses a job-order costing system and the following information is available from its records.The company has three jobs in process: #6,#9,and #13.
 Direct material was requisitioned as follows for each job respectively: 30 percent,25 percent,and 25 percent; the balance of the requisitions was considered indirect.Direct labor hours per job are 2,500; 3,100; and 4,200; respectively.Indirect labor is $33,000.Other actual overhead costs totaled $36,000.
Refer to Webb Company.How much overhead is applied to Work in Process?

Quizplus · Accepted Answer

To calculate the overhead applied to Work in Process, we need to first determine the predetermined overhead rate.

Predetermined overhead rate = Estimated overhead costs / Estimated total direct labor hours

We are given that actual overhead costs are $33,000 + $36,000 = $69,000. To estimate total direct labor hours, we add up the direct labor hours for each job:

2,500 + 3,100 + 4,200 = 9,800

Therefore,

Predetermined overhead rate = $69,000 / 9,800 = $7.04 per direct labor hour

Next, we can calculate the overhead applied to each job:

Job #6: 2,500 direct labor hours x $7.04 per direct labor hour = $17,600 
Job #9: 3,100 direct labor hours x $7.04 per direct labor hour = $21,824 
Job #13: 4,200 direct labor hours x $7.04 per direct labor hour = $29,568

The total overhead applied to Work in Process is the sum of the overhead applied to each job:

$17,600 + $21,824 + $29,568 = $69,992

Rounding to the nearest dollar gives us a total overhead applied to Work in Process of $69,990. However, the closest answer choice to this amount is B ($99,960).