Question

As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs. Direct materials Direct labor Overhead applied Job 102 $26,000 20,000 6,800 Job 103 $55,000 27,200 9,248 Job 104 $55,000 42,000 14,280 Job 102 was started in production in May, and the following costs were assigned to it in May: direct materials, $14,000; direct labor, $3,100; and overhead, $1,054. Jobs 103 and 104 were started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 were finished in June, and Job 104 is expected to be finished in July. No raw materials were used indirectly in June. Using this information, answer the following questions. (Assume this company's predetermined overhead rate did not change across these months.) 1&2. Complete the table below to calculate the cost of the raw materials requisitioned and direct labor cost incurred during June for each of the three jobs? 3. Using the accumulated costs of the jobs, what predetermined overhead rate is used? 4. How much total cost is transferred to finished goods during June?

Answer 1

Req 1&2
		Direct materials
	Job	May	June	total
	102	14,000	12,000	26,000
	103		55,000	55000
	104		55,000	55000
	total	14,000	122,000	136,000
		Direct labor
	Job	May	June	total
	102	3,100	16,900	20,000
	103		27,200	27,200
	104		42,000	42,000
	total	3,100	86,100	89,200
Req 3
	Choose Numerator		/	Choose Denominator		=	OH rate
	Job 102
	overhead cost		/	Direct labor costs		=	overhead rate
	6,800		/	20,000		=	34%
	Job 103
	overhead cost		/	Direct labor costs		=	overhead rate
	9,248		/	27,200		=	34%
	Job 104
	overhead cost		/	Direct labor costs		=	overhead rate
	14,280		/	42,000		=	34%
Req 4		Direct	Direct	applied	total	cost trfd
	Job	materials	labor	overhead	cost	to finished
	102	26,000	20,000	6,800	52,800	52,800
	103	55,000	27,200	9,248	91,448	91,448
	104	55,000	42,000	14,280	111,280	0
	total	136,000	89,200	30,328	255,528	144,248