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. This is calculated as follows: 
Predetermined overhead rate = Estimated total manufacturing overhead / Estimated total amount of allocation base
Estimated total manufacturing overhead = Indirect labor + Other actual overhead costs = $33,000 + $36,000 = $69,000
Estimated total amount of allocation base = Total direct labor hours = 2,500 + 3,100 + 4,200 = 9,800
Predetermined overhead rate = $69,000 / 9,800 = $7.04 per direct labor hour
Now we can calculate the overhead applied to each job:
Job 6: $7.04 x 2,500 direct labor hours x 0.3 = $5,280
Job 9: $7.04 x 3,100 direct labor hours x 0.25 = $5,440
Job 13: $7.04 x 4,200 direct labor hours x 0.25 = $7,392
Total overhead applied = $5,280 + $5,440 + $7,392 = $18,112
Therefore, the correct choice is B, which is $99,960 (the sum of direct materials, direct labor, and overhead applied to Work in Process).