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Creative Web Design uses a job-order costing system to track the costs of its web design projects. The company provides complete website design and hosting services. The following table provides data concerning the three esign projects that were in process during May. There was no work in process at the beginning of May:
Project
Car Jan's Happy
City Flowers Daycare
Designer-hours 30 80 15
Direct labour cost $ 900 $ 1,600 $ 405
Actual overhead costs were $3,250 for May. Overhead costs are applied to projects on the basis of designer-hours. The predetermined overhead rate is $28 per designer-hour. The Car City and Jan's Flowers projects were ompleted in May; the Happy Daycare project was not completed by the end of the month. No other jobs were ii process during May
Required:
Question 1: Compute the amount of overhead cost that would have been charged to each project during May.
Question 2: Prepare a journal entry showing the completion of the Car City and Jan's Flowers projects and the transfer of osts to the Completed Projects (i.e., Finished Goods) account. (If no entry is required for a transaction/event, elect "No journal entry required" in the first account field.)
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