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 $15,000 8,000 4,000 Job 103 $33,000 14,200 7,100 Job 104 $27,000 21,000 10,500 Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $6,000; direct labor, $1,800; and overhead, $900. 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

Dinect Materuals Job To tal June May 9,000 102 #6,000 15,000 $33,000 103 $ 33,000 427,000 27,000 0 104 75,000 69,000 Total G,000 Dineet Labo Total June Job May # 8,000 6,200 4 1,800 102 14,200 14,200 103 21,000 21,000 104 $ Ч1, чор 43,200 Total 1,800 Dinect Materials Job /02 15000-6,000 June: 9,000 1 Dimect Labor Job l02: 4 8,000-1,800 F 6,200 June: 1

3. Overhead Rate Joblo2 Choose Numeractoa Choose Denominator Overhead Rate 1 Estimated over headl Estimated / direct LaboT Oveshead Rate 11 Cost 50/0 $4,000 8,000 Job l03 Overhead Rate Estimated olurect Estimated overhead / 1 labor Cost / 14,200 7,100 Job lo4 Estimated drect / Estimated overhead Cast overhead Rate 11 labor 21,000 / $10,500 4. Dinect Materuials Appuied overhead Di'neet Labor COst Transterred to finished Goods Total Job COst S8,000 $4,000 27, ood 41S,000 102 427,000 14, 200 4 33,000 7,100 454,300 l0,500 458,Soo 31,600f139, 800 i03 S4,300 $ 21,000 27,000 l04 $43,200 $7.5,0 00 To tal 81,300

Job 104 is expected to be finished in July 60 Hnished qo da 0 Job Lo4 will beo. cast trangerred to