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					Job 603					Job 604
Direct materials		$	1,500				$	3,200				$	3,100
Direct labor			1,000					1,520					2,300
Overhead			400					608					920

Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $400; direct labor, $250; and overhead, $100. 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?

Answer 1

Answer Зоь боч 1 calculation of the cost of the Raw Materials used in June. particulars. Amount Amount Job 602 $15.00 tessi prior costs $ 400 $1100 Job 603 $3200 Job 604 $3100 Total Material use $ 7,400 2) calculation of the Direct Labor cost incurred in particulars Amount Amount Job 602 $1000 Less prior cost $ 250 $750 Job 603 $1520 $2300 Tolal Direct Labor $4,520 3) calculation of the pre determined overhead rate used in June. particulars Jaba602 Job 6o4 Over head (A) $400 $920 Direct Labor $1000 $2300 Ratio (A/A) 40% 40% | 4) cost is draus ferred to finished goods inventory in June. particulars Job-602 Job-603 Total Direct Materials $ 1500 $3200 4700 Direct Labor $ 1 000 $ 1520 $ 2520 over head $ 400 $ 608 $ 1008 Total cost Transferred. $2900 $5328 1$8228