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Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $5,900 for direct materials, $9,100 for direct labor, and $6,461 for overhead on its job cost sheet. Job W. which is still in process at year-end, shows charges of $3,100 for direct materials and $4,400 for direct labor. Required: fa. Should any overhead cost be applied to Job W at year-end? 1b. How much overhead cost should be applied to Job W? 2. How will the costs included in Job W's job cost sheet be reported within Sigma Corporation's financial statements at the end of the year? Complete this question . Should any overhead cost be applied to Job W at year-end?
Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $5,900 for direct materials, $9,100 for direct labor, and $6,461 for overhead on its job cost sheet. Job W. which is still in process at year-end, shows charges of $3,100 for direct materials and $4,400 for direct labor. Required: fa. Should any overhead cost be applied to Job W at year-end? 1b. How much overhead cost should be applied to Job W? 2. How will the costs included in Job W's job cost sheet be reported within Sigma Corporation's financial statements at the end of the year? Complete this question . Should any overhead cost be applied to Job W at year-end?
Final answer:Overhead cost is applied toJob Wat the year end, it can be calculated as approximately$3,124, given Sigma Corporation's overhead ratio methodology. The costs associated with Job W will be reflected under the Work in Process category in Sigma Corporation's balance sheet.Explanation:Yes, overhead cost should be applied to Job W at the year-end since Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. The overhead cost is typically calculated as a ratio of the overhead of a similarly completed job (Job V, in this case). In Job V, the ratio of overhead to direct labor is$6,461/$9,100 = 0.71(approximate). Hence, for Job W, the overhead cost can be calculated as0.71 * $4,400 = $3,124(approximate). Regarding Sigma Corporation's financial statements at the year-end, the costs included in Job W's job cost sheet will be reported as Work in Process in the balance sheet. This is because Job W is still in progress at year-end, representing an asset that is expected to bring future economic benefit when the job is completed and turned to sales revenue.Learn more about Overhead Cost Application here:brainly.com/question/32502155#SPJ11...