Questions: A company that uses job order costing reports the following information. Overhead is applied at the rate of 60% of direct materials. The company has no beginning Work in Process or Finished Goods inventories. Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March. Job 1, Job 2, Job 3 Direct materials used: 11,200, 15,200, 4,200 Direct labor used: 19,200, 9,200, 7,200 Determine the total dollar amount of Work in Process Inventory at the end of March.

Solution Steps

To determine the total dollar amount of Work in Process (WIP) Inventory at the end of March, we need to calculate the total costs for Jobs 1 and 3, as they are not finished. The total cost for each job includes direct materials, direct labor, and applied overhead. Overhead is applied at 60% of direct materials. We will sum the total costs of Jobs 1 and 3 to find the WIP Inventory.

The overhead is applied at a rate of \( 60\% \) of direct materials. We calculate the overhead for Jobs 1 and 3 as follows:

\[ \text{Overhead for Job 1} = 0.60 \times 11200 = 6720 \] \[ \text{Overhead for Job 3} = 0.60 \times 4200 = 2520 \]

Next, we calculate the total cost for Jobs 1 and 3 by summing direct materials, direct labor, and overhead:

\[ \text{Total Cost for Job 1} = 11200 + 19200 + 6720 = 37120 \] \[ \text{Total Cost for Job 3} = 4200 + 7200 + 2520 = 13920 \]

Finally, we sum the total costs of Jobs 1 and 3 to find the total dollar amount of Work in Process Inventory:

\[ \text{WIP Inventory} = 37120 + 13920 = 51040 \]

Final Answer