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. JOD 102 922,000 Diegt materials Direct labor Overhead applied JOB 103 $71,000 27.300 10.920 JOD 104 $55,000 41.000 16.400 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $11.000; direct labor, $3,900; and overhead, $1,560. 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? Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Reg 4 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? Direct Materials Job 102 103 104 Total Direct Labor 102 103 104 Total

Answer 1

Answer to Req 1 and 2: Direct Materials Job May 11,000 102 103 104 Total June 11,000 71,000 55,000 Total 22,000 71,000 55,000 148,000 Job 102 103 Direct Labor May June 3,900 7,100 27,300 41,000 Total 11,000 27,300 41,000 79,300 104 Total Materials used in June for Job 102 = $22,000 - $11,000 = $11,000 Direct Labor used in June for Job 102 = $11,000 - $3,900 = $7,100

= Overhead Rate Overhead Rate = 40% Answer to Req 3: Overhead Rate Choose Numerator / Choose Denominator Job 102 Overhead Applied / Direct Labor 4,4001 11,000 Job 103 Overhead Applied / Direct Labor 10,920 / 27,300 Job 104 Overhead Applied 11 Direct Labor 16,400 / 41,000 = Overhead Rate 40% = Overhead Rate 40%

Answer to Req 4: Job Direct Materials 102 22,000 71,000 104 55,000 148,000 Applied Overhead 4,400 10,920 16,400 31,720 Direct Labor 11,000 27,300 41,000 79,300 103 Cost Transferred to Finished Goods 37,400 109,220 Total Cost 37,400 109,220 112,400 259,020 Total 146,620 Overhead Applied = Direct Labor Cost * Overhead Rate