Cornerstone Exercise 16-26 Prepare Job-Order Cost Sheets, Rate, Ending Balance o

Question

Cornerstone Exercise 16-26 Prepare Job-Order Cost Sheets, Rate, Ending Balance of WIP, Finished Goods, and COGS At the beginning of June, Rhone Company had two jobs in process, Job 44 an job 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 overhead rate based on dircct labor cost. (Note Round to four decimal places.) Prepare a bnef 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. (Round all amounts to the nearest dollar) Calculate the cost of goods sold for june

Explanation / Answer

ANSWER A: OVERHEAD RATE BASED ON DIRECT LABOUR COST

JOB 44

Applied Overhead = $ 780 , Direct labour Cost = $ 1200

Overhead Rate = 780/1200 = 0.65 or 65%

JOB 45

Applied Overhead = $ 1950 , Direct Labour Cost = $ 3000

Overhead Rate = 1950/3000 = 65%

ANSWER B: JOB ORDER COST SHEET

ANSWER C: ENDING BALANCES

1) At the end of June, Job 44,45 and 47 were completed . Only Job 46 is in process.

Therefore , Work in Process for June = $ 3285

2) Now, since 3 jobs were transferred to Finished Goods ( Job 44,45&47), only 1 of them was sold (Job 45). Therefore, rest remain in Finished Goods Account (job 44 and 47)

Finished Goods = 10900 + 2624 = $ 13524

ANSWER D: COST OF GOODS SOLD FOR JUNE

Since Job 45 was sold, therefore cost of goods sold = $ 24120

PARTICULARS JOB 44 JOB 45 JOB 46 JOB 47 AMOUNT IN $ Balance, june 1 7080 6450 0 0 Direct materials 2500 7110 1800 1700 Direct Labour 800 6400 900 560 Overheads 520 4160 585 364 TOTAL, JUNE 30TH 10900 24120 3285 2624

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