Birk Co. uses a job order cost system. The following debits (credits) appeared in Birk's work-in-process account for the month of April: April Description Amount 1 Balance $ 4,000 30 Direct materials 24,000 30 Direct labor 16,000 30 Factory overhead 12,800 30 To finished goods (48,000) Birk applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the only job still in process on April 30, has been charged with direct labor of $2,000. What was the amount of direct materials charged to Job No. 5?

Question

Business

Caleb Garrison

15 October, 18:20

Birk Co. uses a job order cost system. The following debits (credits) appeared in Birk's work-in-process account for the month of April: April Description Amount 1 Balance $ 4,000 30 Direct materials 24,000 30 Direct labor 16,000 30 Factory overhead 12,800 30 To finished goods (48,000) Birk applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the only job still in process on April 30, has been charged with direct labor of $2,000. What was the amount of direct materials charged to Job No. 5?

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Quincy Reynolds · Answer 1

The amount of direct materials charged to Job No. 5 is $5,200.

Explanation:

Work in process, April 30 = Balance + Direct material + Direct labor + Factory overhead - Cost of finished goods

= $4,000 + 24,000 + 16,000 + 12,800 - 48,000

= $8,800

Job No 5 = Work in process, April 30 = $8,800

Job No 5 = Direct material + Direct labor + Factory overhead

$8,800 = Direct material + $2,000 + $1,600 ($2,000 * 80%)

Direct material = $8,800 - $2,000 - $1,600

= $5,200

Therefore, The amount of direct materials charged to Job No. 5 is $5,200.