Bob's Powerwasher Company makes custom powerwashers for individual customers. On April 1, one job was in process, Job 900, which had a cost of $45,650. Jobs 901, 902, and 903 were started during the month of July. Data on costs added during the month are as follows:
Overhead is applied to production at the rate of 85% of direct labour cost. Job 903 was completed on April 26, and the client was billed at cost plus 45%. All other jobs remained in process.
$\begin{array}{lllll}&\text { Job } 900&\text { Job } 901&\text { Job } 902&\text { Job } 903\
\text { Direct Materials } & \$ 12,500 & \$ 6,740 & \$ 2,520 & \$ 7,870 \
\text { Direct Labour } & \$ 5,880 & \$ 10,280 & \$ 3,760 & \$ 11,360
\end{array}$
-Refer to Bob's Powerwasher Company.What is the balance in the work-in-process account on April 30?

Question

Bob's Powerwasher Company makes custom powerwashers for individual customers. On April 1, one job was in process, Job 900, which had a cost of $45,650. Jobs 901, 902, and 903 were started during the month of July. Data on costs added during the month are as follows:
Overhead is applied to production at the rate of 85% of direct labour cost. Job 903 was completed on April 26, and the client was billed at cost plus 45%. All other jobs remained in process.
 $\begin{array}{lllll}&\text { Job } 900&\text { Job } 901&\text { Job } 902&\text { Job } 903\
\text { Direct Materials } & \$ 12,500 & \$ 6,740 & \$ 2,520 & \$ 7,870 \
\text { Direct Labour } & \$ 5,880 & \$ 10,280 & \$ 3,760 & \$ 11,360
\end{array}$
-Refer to Bob's Powerwasher Company.What is the balance in the work-in-process account on April 30?

Quizplus · Accepted Answer

To calculate the balance in the work-in-process account on April 30, we need to add the costs for all jobs, including the beginning balance, direct materials, direct labor, and applied overhead. The applied overhead is 85% of direct labor cost for each job. 1. Calculate the overhead for each job:   - Job 900: $5,880 * 85% = $4,998   - Job 901: $10,280 * 85% = $8,738   - Job 902: $3,760 * 85% = $3,196   - Job 903: $11,360 * 85% = $9,6562. Sum the costs for each job:   - Job 900: $45,650 (beginning balance) + $12,500 + $5,880 + $4,998 = $69,028   - Job 901: $6,740 + $10,280 + $8,738 = $25,758   - Job 902: $2,520 + $3,760 + $3,196 = $9,476   - Job 903: $7,870 + $11,360 + $9,656 = $28,8863. Since Job 903 was completed and billed, it is not included in the work-in-process account. Therefore, the balance is the sum of the costs for Jobs 900, 901, and 902:   - $69,028 (Job 900) + $25,758 (Job 901) + $9,476 (Job 902) = $104,262Thus, the balance in the work-in-process account on April 30 is $104,262.

Bob's Powerwasher Company Makes Custom Powerwashers for Individual Customers -Refer to Bob's Powerwasher Company