Question

Che 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 Job 103 Job 104 Direct materials $56,000 $38,000 13,000 5, 200 $58,000 41,000 16,400 Direct labor 25,600 10,240 Overhead applied Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $12,000; direct labor, $3,300; and overhead, $1,320. 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.) 182. 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 4 Reg 1 and 2 Reg 3 Complete the table below to calculate the cost of the raw materials requisitioned and direct labor cost incurred during June for

Answer 1

Answer :-

Req 1 and 2 -

Direct Materials				Explanation
Job	May	June	Total
102	$12,000	$26,000	$38,000	Job 102 started production in May .It mean in end Balance of June Direct Material cost,May month Cost also included. Given at the end of June Direct Material cost - $38,000 and May month Direct Material Cost is $12,000.Thus,June month Direct Material cost= $38,000 -$12,000 = $26,000
103	$0	$56,000	$56,000
104	$0	$58,000	$58,000
Total	$12,000	$140,000	$152,000
Direct Labor
Job	May	June	Total
102	$3,300	$9,700	$13,000	Job 102 started production in May .It mean in end Balance of June Direct Labor cost,May month Cost also included. Given at the end of June Direct Labor cost - $13,000 and May month Direct Labor Cost is $3,300.Thus,June month Direct Labor cost= $13,000 -$3,300 = $9,700
103	$0	$25,600	$25,600
104	$0	$41,000	$41,000
Total	$3,300	$76,300	$79,600

  

Req 3 -

Predetermined Overhead rate = Total Overhead Cost / Direct Labor cost

For Job 102,

Total Overhead Cost = $5,200 (This Cost both may and June month Overhead Cost)

Direct Labor Cost = $13,000

Predetermined Overhead rate = $5,200 / $13,000

Predetermined Overhead rate = 40%

For Job 103 ,

Total Overhead Cost - $10,240

Direct Labor Cost- $25,600

Predetermined Overhead rate= 40%

For Job 104,

Total Overhead Cost - $16,400

Direct Labor cost - $41,000

Predetermined Overhead rate = 40%

Req 4 -

Job	Direct Material	Direct Labor	Overhead	Total cost(Direct Materials+ Direct Labor+ Overhead)	Cost transferred to Finished good during June
102	$38,000	$13,000	$5,200	$56,200	$56,200
103	$56,000	$25,600	$10,240	$91,840	$91,840
104	$58,000	$41,000	$16,400	$115,400	$0
Total	$152,000	$79,600	$31,840	$263,440	$148,040

Job 104 is excepted to Finished in July so no cost is transferred to Finished goods amount.Therefore ,Total cost transferred to Finished goods is $148,040.