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. Job 102 Job 103 Job 104 Direct materials$25,000 $49,000 $55,000 Direct labor 17,000 25,400 40,000 Overhead applied 7,650 11,430 18,000 Job 102 was started in production in May and the following costs were assigned to it in May direct materials. $9.000 direct labor $3,200, and overhead. 51.440. 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.) 182. 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? Complete this question by entering your answers in the tabs below.

Answer 1

1&2.

Direct Materials
Job	May	June	Total
102	$9,000	$16,000 (25,000-9,000)	$25,000
103		49,000	49,000
104		55,000	55,000
Totals	$9,000	$120,000	$129,000
Direct Labor
Job	May	June	Total
102	$3,200	$13,800 (17,000-3,200)	$17,000
103		25,400	25,400
104		40,000	40,000
Totals	$3,200	$79,200	$82,400

3.

Overhead Rate
Overhead cost	/	Direct labor cost	=	Overhead rate
Job 102
$7,650	/	$17,000	=	0.45
Job 103
$11,430	/	$25,400	=	0.45
Job 104
$18,000	/	$40,000	=	0.45

4.

Job	Direct material	Direct labor	Applied overhead	Total cost	Cost transferred to finished goods
102	$25,000	$17,000	$7,650	$49,650	$49,650
103	49,000	25,400	11,430	85,830	85,830
104	55,000	40,000	18,000	113,000
Total	$129,000	$82,400	$37,080	$248,480	$135,480