Olive Productions utilizes job-order costing for textbook production.It allocates overhead at a rate of 130% of direct labor costs.The following is data regarding three jobs: $\begin{array}{llll}&\text { Work in Process }\
&\text { balance }&\text { Costs added in February }\
&\text { On Februany } 1&\text { Direct Labor }&\text { Direct Materials }\\hline
\text { Job \#64 } & \$ 600 & \$ 500 & \$ 200 \
\text { Job \#65 } & \$ 700 & \$ 300 & \$ 300 \
\text { Job \#66 } & \$ 500 & \$ 100 & \$ 250
\end{array}$ Jobs #64 and #66 were completed and sold in February.How much is the balance in the Work in Process account at the end of February?

Question

Quizplus · Accepted Answer

To find the balance in the Work in Process account at the end of February, we need to calculate the total costs for each job, including overhead, and then subtract the costs of the jobs that were completed and sold.1. Calculate overhead for each job:   - Job #64: $500 (Direct Labor) * 130% = $650   - Job #65: $300 (Direct Labor) * 130% = $390   - Job #66: $100 (Direct Labor) * 130% = $1302. Calculate total costs for each job:   - Job #64: $600 (WIP) + $500 (Direct Labor) + $200 (Direct Materials) + $650 (Overhead) = $1,950   - Job #65: $700 (WIP) + $300 (Direct Labor) + $300 (Direct Materials) + $390 (Overhead) = $1,690   - Job #66: $500 (WIP) + $100 (Direct Labor) + $250 (Direct Materials) + $130 (Overhead) = $9803. Subtract the costs of the jobs that were completed and sold (Jobs #64 and #66):   - Total costs before jobs sold: $1,950 (Job #64) + $1,690 (Job #65) + $980 (Job #66) = $4,620   - Costs of jobs sold: $1,950 (Job #64) + $980 (Job #66) = $2,9304. Calculate the balance in the Work in Process account at the end of February:   - $4,620 (Total costs) - $2,930 (Costs of jobs sold) = $1,690Therefore, the balance in the Work in Process account at the end of February is $1,690.

Olive Productions Utilizes Job-Order Costing for Textbook Production Jobs #64 and #66 Were Completed and Sold in February