As of the end of June, the job cost sheets at Racing Wheels, Inc., show the foll

Question

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 23,000 $72,000 $63,000 11,000 29,300 44,000 5,280 14,06421,120 Direct labor overhead applied Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $15,000; direct labor, $3,700; and overhead, $1,776. 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.) 1&2. 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?

Explanation / Answer

Solution 1&2:

Solution 3:

Solution 4:

Computation of cost of raw material and direct labor incurred in June Particulars Job 102 Job 103 Job 104 Total direct material cost $23,000.00 $72,000.00 $63,000.00 Direct material cost requistioned in may $15,000.00 $0.00 $0.00 Raw material cost requisitioned in June $8,000.00 $72,000.00 $63,000.00 Total direct labor cost $11,000.00 $29,300.00 $44,000.00 Direct labor cost incurred in may $3,700.00 $0.00 $0.00 Direct labor cost incurred in June $7,300.00 $29,300.00 $44,000.00

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