Question

At the beginning of June, Rhone Company had two jobs in process, Job 44 and Job 45, with the following accumulated cost information: Job 44 Job 45 Direct materials $5,100 $1,500 Direct labor 1,200 3,000 Applied overhead 780 1,950 Balance, June 1 $7,080 $6,450

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:

Job 44 Job 45 Job 46 Job 47
Direct materials $2,200 $7,150 $1,850 $1,700
Direct labor 900 6,380 960 540
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.

Required:
1. Calculate the overhead rate based on direct labor cost. Round to three decimal places.
2. Prepare a brief 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.
3. Calculate the ending balances of Work in Process and Finished Goods as of June 30.
4. Calculate the Cost of Goods Sold for June.

Answer 1

Answer:

1. Overhead rate based on direct labor cost = 65%

2. Brief job-order cost sheet for the four jobs is attached with this question please find it.

3.

Work in process = $13,356

Finished Goods = $3,434

4.

Cost of Goods Sold = $24,127

Explanation:

                               Job 44    Job 45

Direct materials      $5,100    $1,500

Direct labor             1,200      3,000

Applied overhead   780         1,950

Balance, June 1      $7,080    $6,450

                             Job 44   Job 45   Job 46   Job 47

Direct materials   $2,200   $7,150   $1,850    $1,700

Direct labor          $900      $6,380  $960      $540

1. Over head Rate = Applied overhead / direct labor = (780/1200) x 100= 65%

3. Work in process (Job 44 & 47) = $10,765 + $2,591 = $13,356

Finished Goods (Job 46) = $3,434

4. Cost of Goods Sold (Job 45) = $24,127