The computer workstation furniture manufacturing that Santana Rey started in Jan

Question

The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions's job cost sheets show the following total costs accumulated on three furniture jobs. Direct materials Direct labor Overhead Job 602 $1,700 800 320 Job 603 $3,700 1,440 576 Job 604 $3,000 1,900 760 Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $700; direct labor, $250; and overhead, $100. Jobs 603 and 604 were started in June. Overhead cost is applied with a predetermined rate based on direct labor costs. Jobs 602 and 603 are finished in June, and Job 604 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company's predetermined overhead rate did not change over these months.) verheat expected toplied with eals, $700; dir Required: 1. What is the cost of the raw materials used in June for each of the three jobs and in total? 2. How much total direct labor cost is incurred in June? 3. What predetermined overhead rate is used in June? 4. How much cost is transferred to finished goods inventory in June? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4

Explanation / Answer

1 Job 602 Job 603 Job 604 Total May costs 700 0 0 700 June costs 1000 3700 3000 7700 Total 1700 3700 3000 8400 2 Job 602 Job 603 Job 604 Total May costs 250 0 0 250 June costs 550 1440 1900 3890 Total 800 1440 1900 4140 3 Predetermined overhead rate=576/1440= 40% 4 Job Raw materials Direct labor Overhead Total cost Cost transferred to finished goods Costs of ending WIP 602 1700 800 320 2820 2820 0 603 3700 1440 576 5716 5716 0 604 3000 1900 760 5660 0 5660 Total 8400 4140 1656 14196 8536 5660

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