Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

At the end of June, the job cost sheets of Racing Wheels, Inc., shows the follow

ID: 2427566 • Letter: A

Question

At the end of June, the job cost sheets of Racing Wheels, Inc., shows the following total costs accumulated on three custom jobs:

Job 102 began production in May, and the following costs were assigned to it in May: direct materials $6,000; direct labor $1,800; and overhead $900. Jobs 103 and 104 began in June. One applies overhead cost 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:

What is the cost of the raw materials requisitioned in June for each of the three jobs?

How much direct labor cost is incurred during June for each of the three jobs?

What predetermined overhead rate is used during June?

How much total cost is transferred to finished goods during June?

Job 102 Job 103 Job 104 Direct Materials $15,000 $33,000 $27,000 Direct Labor 8,000 14,200 21,000 Overhead 4,000 7,100 10,500

Explanation / Answer

During May During June Finished in June Job 102 Job 102 Job 103 Job 104 Direct Materials $ 6,000 $ 9,000 $ 33,000 $ 27,000 Material Requisitioned in June 1 Direct Labor 1,800 6,200 14,200 21,000 Direct Labor cost in June 2 Overhead 900 3,100 7,100 10,500 Overhead Rate 900/1800 3100/6200 7100/14200 10500/21000 50% 50% 50% 50% 50% of direct labor cost 3 Total Cost transferred to finished goods $ 8,700 $ 18,300 $ 54,300 $ 81,300 4 Job 102 Job 103