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Leeds Architectural Consultants uses a job-order costing system and applies studio overhead to jobs on the basis of direct staff costs. Because Leeds Architectural Consultants is a service firm, the names of the accounts it uses are different from the names used in manufacturing companies. The following costs were recorded in January:
There were no beginning inventories in January. At the end of January, only one job was still in process. This job (Lexington Gardens Project) had been charged with $6,500 in direct staff costs. Requirement 1: Compute the predetermined overhead rate that was used during January. Requirement 2: Complete the following job cost sheet for the partially completed Lexington Gardens Project. (Hint: Cost of goods manufactured equals beginning work in process inventory plus manufacturing costs incurred less ending work in process inventory.) Job Cost Sheet, Lexington Gardens Project:
Total cost to January 31 - ?
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