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 $27,000 17,000 Sob 103 $63.000 25,400 10.16 Job 104 $49,000 41.000 16,00 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials. $12,000, direct labor, $3,400, and overhead, $1,360. 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

Direct Materials
Job	May	June	Total
102	$12,000	$15,000 [$27,000 - $12,000]	$27,000
103		$63,000	$63,000
104		$49,000	$49,000
Total	$12,000	$127,000	$139,000
Direct Labor
Job	May	June	Total
102	$3,400	$13,600 [$17,000 - $3,400]	$17,000
103		$25,400	$25,400
104		$41,000	$41,000
Total	$3,400	$80,000	$83,400

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Overhead rate
Choose Numerator	/	Choose denominator	=	Overhead rate
Job 102
Estimated overhead costs	/	Estimated labor cost		Overhead rate
$6,800	/	$17,000		40.00%
Job 103
Estimated overhead costs	/	Estimated labor cost		Overhead rate
$10,160	/	$25,400		40.00%
Job 104
Estimated overhead costs	/	Estimated labor cost		Overhead rate
$16,400	/	$41,000		40.00%

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Job	Direct Materials	Direct Labor	Applied Overhead	Total Cost	Costs Transferred to Finished Goods
102	$27,000	$17,000	$6,800	$50,800	$50,800 [Refer note below]
103	$63,000	$25,400	$10,160	$98,560	$98,560 [Refer note below]
104	$49,000	$41,000	$16,400	$106,400
Total	$139,000	$83,400	$33,360	$255,760	$149,360

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Note - Job 102 & Job 103 are completed in June. So, the entire cost incurred for Job 102 & Job 103 is transferred to finished goods inventory.