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 was started in production in May and the following costs were assigned to it in May: direct materials, $9,000; direct labor,

 $3,700; and overhead, $1,184. 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

Requirement 1 & 2:

Direct material

Job	may	june	total
102	9000	8000(17000-9000)	17000
103	-	50000	60000
104	-	60000	60000
Total	900000	118000	157000

Direct labour

Job	may	June	total
102	3700	9300(13000-3700)	13000
103	-	28500	28500
104	-	38000	38000
Total	3700	75800	79500

Requirement 3:

Overhead rates

Numerator	denominator	overhead rate
102
Accumulated overhead	Direct labour cost.	Overhead rate
4160	13000	0.32
103
Accumulated overhead	direct labour cost	overhead rate
9120	28500	0.32
104
Accumulated depreciation	direct labour costs	overhead rate
12160	38000	0.32

Note: Direct labourcost is taken as the base for calculating predetermined overhead rate, as mentioned in the question.

​​​​​Retirement 4: cost of goods transferred to finishes goods.

Job	direct material	direct labour	overhead applied	total cost	cost of goods transferred to finished goods
102	8000	9300	2976(4160-1184)	20276	20276
103	50000	13000	9120	72120	72120
104	60000	38000	12160	110160	110160
Total					202556

Note: there is nothing mentioned in the question about work in progress. Therefore, it is assumed that there is no work in progress and all the costs incurred in the ninth are transferred to the finished goods.