Question:
Lopez Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following.
|
Date
|
Explanation
|
Debit
|
Credit
|
Balance
|
|
2011
|
|
|
|
|
|
Dec. 31
|
Direct materials cost
|
1,500,000
|
|
1,500,000
|
|
31
|
Direct labor cost
|
240,000
|
|
1,740,000
|
|
31
|
Overhead costs
|
450,000
|
|
2,190,000
|
|
31
|
To finished goods
|
|
2,100,000
|
90,000
|
|
|
|
|
|
|
|
1. Determine the overhead rate used (based on direct material cost).
2. Only one job remained in the goods in process inventory at December 31, 2011. Its direct materials cost is $30,000. How much direct labor cost and overhead cost are assigned to it?