2. The Lexington Gardens Project is the only job remaining in Work in
Process at the end of the month; therefore, the entire $35,000 balance
in the Work in Process account at that point must apply to it. Recogniz-
ing that the predetermined overhead rate is 160% of direct staff costs,
the following computation can be made:
Total cost in the Lexington Gardens Project... $35,000
Less: Direct staff costs... $ 6,500
Studio overhead cost ($6,500 × 160%)... 10,400 16,900
Costs of subcontracted work ... $18,100
With this information, we can now complete the job cost sheet for the
Lexington Gardens Project:
Costs of subcontracted work ... $18,100
Direct staff costs ... 6,500
Studio overhead... 10,400
Total cost to January 31 ... $35,000
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