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 Job 44 Job 45 Direct materials $5,400 $1,450 Direct labor Applied overhead 7202,040 Balance, June 1 $7,320 $6,890 1,200 3,400 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: Job 44 Job 45 Job 46 Job 47 Direct materials $2,300 $7,110 $1,850 $1,800 Direct labor 760 6,300 1,000 460 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.

Explanation / Answer

Job 44 predetermined overhead rate = applied overhead/ direct labour Predetermine overhead rate = 720/1200 = 0.6 i.e. 60% perdetermine overhead rate using job 45 is also same 2) Rohne company job order cost sheet for the month of june Particulars Job 44 Job 45 Job 46 Job 47 Beginning balance 7320 6890 Direct material 2300 7110 1850 1800 direct labour 760 6300 1000 460 applied overhead 60% of direct labour 456 3780 600 276 Total june 30 10836 24080 3450 2536 3) Calculation of ending balance of WIP and Finished goods Balance in WIP consist of Job 46 WIP JUNE 30 $3450 Finished goods , june 30= Finised goods june 1+finished goods Job 44+finished goods job 47 finished goods = 0+10836+2536 = 13372 4) Job 45 was sold during june Cost of Goods sold = 24080

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