As of the end of June, the job cost sheets at Racing Wheels, Inc., show the foll
ID: 2464889 • Letter: A
Question
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
$ 32,000
$ 54,000
$ 62,000
Direct labor
13,000
26,600
40,000
Overhead
6,240
12,768
19,200
Job 102 was started in production in May and the following costs were assigned to it in May: direct materials, $10,000; direct labor, $3,300; and overhead, $1,584. 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:
Job
May
June
Total
102
103
104
Total
Direct Labor:
Job
May
June
Total
102
103
104
Total
3. What predetermined overhead rate is used for Job 102?
Overhead Rate
Choose Numerator:
/
Choose Denominator:
=
Overhead Rate
/
=
Overhead Rate
/
=
4. How much total cost is transferred to finished goods during June?
Job
Direct Material
Direct Labor
Applied Overhead
Total Cost
Cost Transferred to Finished Goods
102
$32,000
$13,000
103
54,000
26,600
104
62,000
40,000
Total
$148,000
$79,600
As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs.
Explanation / Answer
Answer: 1
Direct Materials:
Job
May
June
Total
102
10000
32000 - 10000 = 22000
32000
103
54000
54000
104
62000
62000
Total
138000
148000
Answer:2
Direct Labor:
Job
May
June
Total
102
3300
13000-3300 = 9700
13000
103
26600
104
40000
Total
76300
79600
Answer:3
Overhead Rate
Choose Numerator:
/
Choose Denominator:
=
Overhead Rate
6240
/
16000
=
Overhead Rate
6240
/
16000
=
39%
Answer:4
Direct Materials:
Job
May
June
Total
102
10000
32000 - 10000 = 22000
32000
103
54000
54000
104
62000
62000
Total
138000
148000
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