Exercise 212 Don Lieberman and Associates a CPA firm uses jo

Exercise 2-12 Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs conducted during Brian Mike $610 Direct materials Auditor labor Auditor hours $470 280 costs $6,0007, $3,575 49 74 91 Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $55 per auditor hour. The Lynn job is the only incomplete job at the end of November. Actual overhead for the month was $13,800. (a) Determine the cost of each job Cost Lynn Erian Mike (b) Indicate the balance of the Service Contracts in Process account at the end of November. Balance in service contracts in process account (c) Calculate the ending balance of the Operating Overhead account for November Balance in operating overhead account s

Solution

1. Cost of the jobs

The balance in service process a/c is 10680 i.e. lynn job

The total over head incurred is 13800

The total overhead applied. Is 11770

The balance in overhead a/c will be 2030 dr balance

Particulars	lynn	brian	mike
Direct material	610	470	280
Audit labour cost	6000	7600	3575
Overhead cost	4070	5005	2695
Total cost for jobs	10680	13075	6550