Reference no: EM132687795

At the beginning of March, Mendez Company had two jobs in process, Job 86 and Job 87, with the following accumulated cost information:

                                       Job 86                 Job 87

Direct materials            $4,800              $1,600

Direct labor                     1,200                   3,000

Applied overhead              888               2,220

Balance, March 1              $6,888           $6,820

During March, two more jobs (88 and 89) were started. The following direct materials and direct labor costs were added to the four jobs during the month of March:

                                     Job 86             Job 87               Job 88               Job 89

Direct materials              $3,000          $7,000              $2,100           $1,500

Direct labor                        800               6,000                 900              500

At the end of March, Jobs 86, 87, and 89 were completed. Only Job 87 was sold. On March 1, the balance in Finished Goods was zero.

Required:

Problem 1. Calculate the overhead rate based on direct labor cost.

Problem 2. Prepare a brief job-order cost sheet for the four jobs. Show the balance as of March 1 as well as direct materials and direct labor added in March. Apply overhead to the four jobs for the month of March, and show the ending balances.