Serenje Manufacturing Company produces nameplates and uses a job-order cost system. The following...

Question

Serenje Manufacturing Company produces nameplates and uses a job-order cost system. The following amounts relate to nameplate production for the month of June:

Work in process inventory, June 1	$620
Cost of materials directly assigned to production during June	$1,800
Cost of labor directly assigned to production during June	$1,200
Cost of nameplates completed during June	$4,300

Serenje applies overhead at a predetermined overhead rate of 60% of direct material cost. At the end of June, only one job was in Work in Process inventory. This job had been charged with $150 of direct material cost. What is the direct labor cost assigned to this job?

A) $100

B) $160

C) $225

D) $530

David · Accepted Answer

WORK IN PROGRESS ACCOUNT       
Opening balance 620 Completed output 4300 
materials charged 1800     
Labor charged 1200 Closing balance 400 
Overheads charged 1080 
(BALANCING 
FIGURE)   
(60% of 1800)       
  4700   4700 
    Details of closing WIP     
 TOTAL 400   
       
 material component 150   
 Overhead component 90   
 (60% of 150)     
 BALANCE (LABOR COMPONENT) 160 ANSWER 
 TOTAL 400   
 
    HENCE CORRECT ANSWER IS (B) $ 160

Serenje Manufacturing Company produces nameplates and uses a job-order cost system. The following amounts relate to nameplate production for the month of June: Work in process inventory, June 1 $620...

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