The computer workstation furniture manufacturing that Santana Rey started in Jan

Question

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 Job 602 Direct materials $1,600 700 280 Job 603 $3,200 1,360 544 Job 604 $2,900 2,100 840 Direct labor Overhead Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $800; direct labor, $250; and overhead, $100. 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?

Explanation / Answer

Required 1 job 602 job603 job 604 total May costs 800 june costs 900 3,200 2,900 7000 Total 1700 3200 2900 Required 2 job 602 job603 job 604 total May costs 250 june costs 450 1,360 2,100 3910 Total 700 1360 2100 Requirement 3 predetermined overhead rate = estimated MOH/direct labor costs 100/250 40.00% predetermined overhead rate 40% Requirement 4 Raw Direct overhead total cost Cost trfd cost of Job Materials labor applied to FG ending WIP 602 1,600 700 280 2,580 2,580 0 603 3,200 1,360 544 5,104 5,104 0 604 2,900 2,100 840 5,840 5,840 total 7,700 4160 1664 13,524 7,684 5,840

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