At the beginning of June, Rhone Company had two jobs in process, Job 44 and Job

Question

At the beginning of June, Rhone Company had two jobs in process, Job 44 and Job 45, with the following accumulated cost information:

During June, two more jobs (46 and 47) were started. The following direct materials and direct labor costs were added to the four jobs during the month of June:

At the end of June, Jobs 44, 45, and 47 were completed. Only Job 45 was sold. On June 1, the balance in Finished Goods was zero.

Calculate the Cost of Goods Sold for June.

1. Calculate the overhead rate based on direct labor cost. Round to three decimal places.

The overhead rate based on direct labor cost is %

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. Refer to Amount Descriptions for the exact wording of text items within your job-order cost sheets. All amount cells must have an entry; enter zeros as needed.

Rhone Company

Job-Order Cost Sheets

For the Month of June

1

Job 44

Job 45

Job 46

Job 47

2

Beginning balance, June 1

3

4

5

6

3. Calculate the ending balances of Work in Process and Finished Goods as of June 30.

4. Calculate the Cost of Goods Sold for June.

Cost of Goods Sold:

Job 44 Job 45 Direct materials $5,250 $1,600 Direct labor 1,500 3,300 Applied overhead 1,125 2,475 Balance, June 1 $7,875 $7,375

Explanation / Answer

Solution 1:

Overhead rate based on direct labor cost = $1,125 / 1500 = 75% of direct labor cost

Solution 2:

Solution 3:

Ending Work in Process = Cost of job 46 = $3,325

Ending finished goods inventory - Cost of job 44 + Cost of job 47

= $11,435 + $2,575 = $14,010

Solution 4:

Cost of goods sold for june = Cost of job 45 = $25,545

Rhone Company Job Order Cost Sheets For the Month of June Particulars Job 44 Job 45 Job 46 Job 47 Beginning balance, June 1 $7,875.00 $7,375.00 Direct material $2,300.00 $7,110.00 $1,750.00 $1,700.00 Direct labor $720.00 $6,320.00 $900.00 $500.00 Overhead applied (75% of direct labor cost) $540.00 $4,740.00 $675.00 $375.00 Total Cost $11,435.00 $25,545.00 $3,325.00 $2,575.00

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