Question

Applying Concepts On June 1, Delman Company's work in process inventory consisted of three jobs with the following costs: Job 40 Job 41 Job 42 Direct materials $1,000 $2,000 $700 Direct labor 1,800 1,200 800 Applied overhead 1,260 840 560 During June, four more jobs were started. Information on costs added to the seven jobs during the month is as follows: Job 40 Job 41 Job 42 Job 43 Job 44 Job 45 Job 46 Direct materials $3,000 $5,000 $4,700 $3,400 $1,500 $800 $350 Direct labor 4,000 3,200 2,800 1,300 900 740 160 By the end of June, Jobs 40, 41, 42, and 44 were completed. Jobs 40 and 42 were sold. (There were no jobs in Finished Goods on June 30. Delman Company prices its jobs at cost plus 40%. Required: 1. Calculate the predetermined overhead rate based on direct labor cost. % 2. Fill in the following table to calculate the ending Work in Process balance for each job as of June 30. Job 41 Job 42 Job 43 Job 44 Job 45 Job 46 5,000 4,700 3,400 1,500 800 350 3,200 2,800 1,300 900 740 160 Job 40 Beginning balance Direct materials 3,000 Direct labor 4,000 Applied overhead Ending balance 3. Calculate the ending balance of: Work in Process Finished Goods Cost of Goods Sold 4. Sales revenue for June equaled $

Answer 1

1) Overhead rate = 1260/1800 = 70% of direct labor cost

2) Job Cost sheet

	Job 40	Job 41	Job 42	Job 43	Job 44	Job 45	Job 46
Beginning balance	4060	4040	2060
Direct material	3000	5000	4700	3400	1500	800	350
Direct labor	4000	3200	2800	1300	900	740	160
Applied overhead	2800	2560	1960	910	630	518	112
Ending balance	13860	14800	11520	5610	3030	2058	622

3) Work in process = 5610+2058+622 = 8290

Finished goods = $0 or (14800+3030= 17830)

Cost of goods sold = 13860+11520 = 25380

4) Sales revenue = 25380*1.4 = $35532