Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost.At the end of October,Juanita had one job still in process.The job cost sheet for this job contained the following information:
An additional $100 of labor was needed in November to complete this job.For this job,how much should Juanita have transferred to finished goods inventory in November when it was completed?
A) $1,330
B) $500
C) $1,230
D) $1,730

Question

Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost.At the end of October,Juanita had one job still in process.The job cost sheet for this job contained the following information:
 An additional $100 of labor was needed in November to complete this job.For this job,how much should Juanita have transferred to finished goods inventory in November when it was completed?
A) $1,330 
B) $500 
C) $1,230 
D) $1,730

Quizplus · Accepted Answer

Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred
$600 = Predetermined overhead rate × $150
Predetermined overhead rate = $600 ÷ $150 = 4.0
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Juanita Corporation Uses a Job-Order Costing System and Applies Overhead