Question

The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions's job cost sheets show the following total costs accumulated on three furniture jobs. Job 602 $1,300 Direct materials Direct labor Job 603 $3,100 1,409 700 Job $3,200 2,100 1,050 45e Job 602 was started in production in May, and these costs were assigned to it in May, direct materials, $700; direct labor, $250; and overhead, $125, Jobs 603 and 604 were started in June. Overhead cost is applied with a predetermined rate based on direct labor costs. Jobs 602 and 603 are finished in June, and Job 604 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company's predetermined overhead rate did not change over these months.) Required: 1. What is the cost of the raw materials used in June for each of the three jobs and in total? 2. How much total direct labor cost is incurred in June? 3. What predetermined overhead rate is used in June? 4. How much cost is transferred to finished goods inventory in June? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the cost of the raw materials used in June for each of the three jobs and in total? Job 602 Job 603 Job 604 Total May costs June costs Total Proy 1 of 12 !!! Next >

Answer 1

1.

	Job 602	Job 603	Job 604	Total
May costs	700	-	-	700
June costs	600	3100	3200	6900
Total	1300	3100	3200	7600

2.

	Job 602	Job 603	Job 604	Total
May costs	250	-	-	250
June costs	650	1400	2100	4150
Total	900	1400	2100	4400

3. Predetermined overhead rate = Overheads/ Direct labor cost = 700/ 1400 = 50%

4.

Job	Raw materials	Direct Labor	Overhead applied	Total cost	Costs transferred to finished goods	Costs of ending WIP
602	1300	900	450	2650	2650
603	3100	1400	700	5200	5200
604	3200	2100	1050	6350		6350
Total	7600	4400	2200	14200	7850	6350