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 6,120 Job 103 $58,000 25,600 9,216 Job 104 $63,000 43,000 15,480 Job 102 was started in production in May, and the following costs were assigned to it in May: direct materials, $12,000; direct labor, $3,000; and overhead, $1,080. 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

solution: 1&2 Job Total Direct material May June 102 12000 103 104 12000 15000 58000 63000 136000 27000 58000 63000 148000 Total Job Total Direct labor May June 102|| 3000 103 104 3000 14000 25600 43000 82600 17000 25600 43000 85600 Total 3) Overhead rate choose Denominator overhead rate direct labor cost 17000 overhead rate 36.00% choose numerator Job 102 Overhead applied 61207 Job 103 Overhead applied 92167 Job 104 Overhead applied 15480/ overhead rate direct labor cost 25600 36.00% direct labor cost 43000 overhead rate 36.00% 4.) Job Direct material Direct labor 102 27000 103 58000 104 63000 148000 applied overhead Total cost Cost Transferred to Finished Goods 17000 6120 501201 50120 25600 9216 92816 92816 43000 15480 1214801 0 85600 30816 264416 142936 Total