Question

2 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. Direct materiais Direct labor Overhead Job 602 $1,800 700 350 Job 603 $3,600 1,300 690 Job 604 $3,200 1,500 750 eBook Job 602 was started in production in May, and these costs were assigned to it in May, direct materials, $700; direct labor, $150; and overhead, $75. 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the cost of the raw materials used in June for each of the three jobs and in total? Job 602 Job 603 Job 004 Total May costs Sune costs Total RE Required 2 > < Prev 2 of 2 Next 22 W N 80 FS 57 FB 2 3 4 & 5 6 7 8

Answer 1

Solution

Solution 1:

	Job 602 ($)	Job 603 ($)	Job 604 ($)	Total ($)
May costs	700			700
June costs	1100 (1800-700)	3600	3200	7900
Total	1800	3600	3200	8600

Solution 2:

	Job 602 ($)	Job 603 ($)	Job 604 ($)	Total ($)
May costs	150			150
June costs	550	1380	1500	3430
Total	700	1380	1500	3580

Solution 3:

Predetermined overhead rate = Overhead/Direct labor = $350/ $700 = 50%

Solution 4:

Job	Raw Materials ($)	Direct Labor ($)	Overhead Applied ($)	Total Cost ($)	Cost transferred to finished goods ($)	Costs of Ending WIP ($)
602	1800	700	350	2850	2850
603	3600	1380	690	5670	5670
604	3200	1500	750	5450		5450
Total					8228

Please give thumbs up if you like my answer :-)