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Firefox File Edit View History Bookmarks Tools Window Help Google Facebook Chapter 15 Exercises x , 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 $35,000 $57,000 $54,000 15,000 27,500 41,000 Overhead applied 6,750 12,375 18,450 Direct labor Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $8,000; direct labor, $3,100; and overhead, $1,395. Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. No raw materials are 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 given below table to calculate the cost of the raw materials requisitioned and direct labor cost incurred during June for each of the three jobs? Direct Materials May June 102 8,000 $ 27,000 $ 57,000 54,000 138,000 $ 35,000 57,000 54,000 146,000 103 103 104 Total Direct Labor 8,000 $ May June 102 103 104 Total 3,100 $ 11,900 $ 27,500 41,000 80,400 $ 15,000 27,500 41,000 83,500 3,100 $Explanation / Answer
3. Predetermined overhead rate used in June
Overhead rate
Numerator
Job 102
Estimated overhead cost
/
Estimated labor cost
=
Overhead rate
5355
/
11900
=
0.45
Job 104
Estimated overhead cost
/
Estimated labor cost
=
Overhead rate
18450
/
41000
=
0.45
4. Total cost transferred to finished goods during June
Job
Direct material
Direct labor
Applied OH
Total cost
Cost transferred to finished goods
102
35000
15000
6750
56750
44255
103
57000
27500
12375
96875
125500
104
54000
41000
18450
113450
-
Total
146000
83500
37575
267075
169755
Overhead rate
Numerator
Job 102
Estimated overhead cost
/
Estimated labor cost
=
Overhead rate
5355
/
11900
=
0.45
Job 104
Estimated overhead cost
/
Estimated labor cost
=
Overhead rate
18450
/
41000
=
0.45
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