Sigma corporation applies overhead cost to jobs on the basis of direct labor cost. job v, which was started and completed during the current period, shows charges of $5,000 for direct materials, $8,000 for direct labor, and $6,000 for overhead on its job cost sheet. job w, which is still in process at year-end, shows charges of $2,500 for direct materials and $4,000 for direct labor.

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Business

Kathryn Wang

13 January, 15:01

Sigma corporation applies overhead cost to jobs on the basis of direct labor cost. job v, which was started and completed during the current period, shows charges of $5,000 for direct materials, $8,000 for direct labor, and $6,000 for overhead on its job cost sheet. job w, which is still in process at year-end, shows charges of $2,500 for direct materials and $4,000 for direct labor.

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Jamie Kirby · Answer 1

Job V had $8,000 of direct labor, and $6,000 of overhead was applied to the job. $6,000 divided by $8,000 =.75 overhead rate. In other words, the application was based on taking $8,000 of DL x. 75 rate = $6,000 overhead.

For Job W, take $4,000 DL x same. 75 rate = $3,000

The OH cost to be applied to W at year-end is $3,000.