Question

4.5 At the beginning of June, Galway Company had two jobs in process, Job 78 and Job 79, with the following accumulated cost information: Job 79 Direct materials Direct labor Applied overhead Balance, June 1 Job 78 $1,000 600 750 $2,350 $ 800 1,000 1.250 $3,050 During June, two more jobs (80 and 81) were started. The following direct materials and direct labor costs were added to the four jobs during the month of June: Job 78 $500 400 Job 79 $1,110 Direct materials Direct labor Job 80 $ 900 2,000 Job 81 $100 1,400 320 At the end of June, Jobs 78, 79, and 80 were completed. Only Job 79 was sold. On June 1, the balance in Finished Goods was zero. 1. Calculate the overhead rate based on direct labor hours (using the applied overhead info from one of the jobs in progress). 2. Prepare a brief job-order cost sheet for the four jobs. Show the balance as of June 1 as well as direct materials and direct labor added in June. Apply overhead to the four jobs for the month of June and show the ending balances. Job 78 Job 79 Job 80 Job 81 Beg. Bal 6/1 DM DL Applied OH Total 6/30

3. calculate the ending balances of work in process and finished goods as of June 30.

A. WIP:

B, FG:

4. calculate cost of goods sold for June.

Answer 1

1. Ordinary the predetermined overhead rate can be calculate by using estimated overhead and in the case, estimated direct labor cost. so figure were not given. So, it's possible to work backwards from the applied overhead by the beginning of june for job 78 and 79.

Applied Overhead= Predetermined overhead rate× Actual activity level for job 78

750=Predetermined overhead rate×600

Predetermined overhead rate=750/600

=1.25 % Of direct labor cost

(The predetermined overhead rate using job 79 is same Or identical)

2. Job 78 job 79 job 80 job 81

Beginning balance 2350 3050 0 0

Direct material 500 1110 900 100

Direct labor 400 1400 2000 320

Applied overhead 500 1750 2500 400

Total 30 june 3750 7310 5400 820

3. By end of june job 78,79,80 have been completely transfer out of work in process. So, end balance in work in progress consider of job 81.

Work in Progress june 30 $ 820

while three jobs 78,79,80 we're transfer out of work in progress and into finished goods during june, only two jobs remains job 78,80

finished goods june 1

job 78 3750

job 80 5400

finished goods june 30 9150

4. One job 79 was sold during june

cost of good sold 7310

Thanks...