Question

In: Accounting

The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of...

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.

Job 602 Job 603 Job 604
Direct materials $ 1,500 $ 3,100 $ 2,600
Direct labor 900 1,540 2,200
Overhead 540 924 1,320

Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $500; direct labor, $250; and overhead, $150. 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.)


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?

What is the cost of the raw materials used in June for each of the three jobs and in total?

Job 602 Job 603 Job 604 Total
May costs
June costs
Total

How much total direct labor cost is incurred in June?

Job 602 Job 603 Job 604 Total
May costs
June costs
Total

What predetermined overhead rate is used in June?

Predetermined overhead rate

How much cost is transferred to finished goods inventory in June?

Job Raw Materials Direct Labor Overhead Applied Total Cost Cost transferred to finished goods Costs of Ending WIP
602
603
604
Total

Solutions

Expert Solution

  • [1]

Job 602

Job 603

Job 604

Total

May Costs

$500

$0

$0

$500

June costs

$1,000

$3,100

$2,600

$6,700

Total

$1,500

$3,100

$2,600

$7,200

  • [2]

Job 602

Job 603

Job 604

Total

May Costs

$250

$0

$0

$250

June costs

$650

$1,540

$2,200

$4,390

Total

$900

$1,540

$2,200

$4,640

  • [3]

Job 602

Job 603

Job 604

A

Overhead

$540

$924

$1,320

B

Direct Labor cost

$900

$1,540

$2,200

C = A/B

Predetermined overhead rate

60%

60%

60%

  • [4]

Job

Raw Materials

Direct Labor

Overhead Applied

Total Cost

Cost transferred to finished goods

Cost of Ending WIP

602

$1,500

$900

$540

$2,940

$2,700

$240

603

$3,100

$1,540

$924

$5,564

$5,430

$134

604

$2,600

$2,200

$1,320

$6,120

$0

$6,120

Total

$7,200

$4,640

$2,784

$14,624

$8,130

$6,494


Related Solutions

The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of...
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. Job 602: Direct Materials: $1400, direct labor $1,000, Overhead $500 Job 603: Direct Materials: $3,600, direct labor $1,400, Overhead $700 Join 604: Direct Materials: $3,200, direct labor $2,200, Overhead $1,100 Job 602 was started in production in May, and these costs were assigned to it...
The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of...
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. Job 602 Job 603 Job 604 Direct materials $ 1,500 $ 3,300 $ 2,700 Direct labor 800 1,420 2,100 Overhead 400 710 1,050 Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $600; direct labor,...
Santana Rey expects sales of Business Solutions’s line of computer workstation furniture to equal 300 workstations...
Santana Rey expects sales of Business Solutions’s line of computer workstation furniture to equal 300 workstations (at a sales price of $4,000 each) for 2019. The workstations’ manufacturing costs include the following. Direct materials $ 710 per unit Direct labor $ 310 per unit Variable overhead $ 80 per unit Fixed overhead $ 24,000 per year The selling expenses related to these workstations follow. Variable selling expenses $ 45 per unit Fixed selling expenses $ 3,200 per year Santana is...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture. Required: 1. Classify the following manufacturing costs of Business Solutions by behavior and traceability. Product Costs Cost by Behavior Cost by Traceability   1. Monthly flat fee to clean workshop   (Click to select)VariableFixed   (Click to select)IndirectDirect   2. Laminate coverings for desktops   (Click to select)VariableFixed   (Click to select)IndirectDirect   3. Taxes on assembly workshop   (Click to select)FixedVariable   (Click to select)IndirectDirect   4. Glue to assemble workstation component...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture. Required: 1. Classify the following manufacturing costs of Business Solutions by behavior and traceability. Product Costs Cost by Behavior Cost by Traceability   1. Monthly flat fee to clean workshop   (Click to select)VariableFixed   (Click to select)DirectIndirect   2. Laminate coverings for desktops   (Click to select)FixedVariable   (Click to select)IndirectDirect   3. Taxes on assembly workshop   (Click to select)FixedVariable   (Click to select)IndirectDirect   4. Glue to assemble workstation component...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture. Required: 1. Classify the following manufacturing costs of Business Solutions by behavior and traceability. Product Costs Cost by Behavior Cost by Traceability   1. Monthly flat fee to clean workshop   (Click to select)VariableFixed   (Click to select)IndirectDirect   2. Laminate coverings for desktops   (Click to select)VariableFixed   (Click to select)IndirectDirect   3. Taxes on assembly workshop   (Click to select)FixedVariable   (Click to select)IndirectDirect   4. Glue to assemble workstation component...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation...
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture. Required: 1. Classify the following manufacturing costs of Business Solutions by behavior and traceability. Product Costs Cost by Behavior Cost by Traceability   1. Monthly flat fee to clean workshop   (Click to select)FixedVariable   (Click to select)IndirectDirect   2. Laminate coverings for desktops   (Click to select)VariableFixed   (Click to select)IndirectDirect   3. Taxes on assembly workshop   (Click to select)VariableFixed   (Click to select)IndirectDirect   4. Glue to assemble workstation component...
Santana Rey expects second-quarter 2020 sales of Business Solutions’s line of computer furniture to be the...
Santana Rey expects second-quarter 2020 sales of Business Solutions’s line of computer furniture to be the same as the first quarter’s sales (reported below) without any changes in strategy. Monthly sales averaged 39 desk units (sales price of $1,200) and 15 chairs (sales price of $450). BUSINESS SOLUTIONS—Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2020 Sales† $ 160,650 Cost of goods sold‡ 119,400 Gross profit 41,250 Expenses Sales commissions (10%) 16,065 Advertising expenses 7,500 Other fixed...
Santana Rey expects second-quarter 2020 sales of Business Solutions’s line of computer furniture to be the...
Santana Rey expects second-quarter 2020 sales of Business Solutions’s line of computer furniture to be the same as the first quarter’s sales (reported below) without any changes in strategy. Monthly sales averaged 42 desk units (sales price of $1,270) and 22 chairs (sales price of $520). BUSINESS SOLUTIONS—Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2020 Sales† $ 194,340 Cost of goods sold‡ 145,440 Gross profit 48,900 Expenses Sales commissions (10%) 19,434 Advertising expenses 9,600 Other fixed...
Santana Rey expects second-quarter 2020 sales of Business Solutions’s line of computer furniture to be the...
Santana Rey expects second-quarter 2020 sales of Business Solutions’s line of computer furniture to be the same as the first quarter’s sales (reported below) without any changes in strategy. Monthly sales averaged 41 desk units (sales price of $1,260) and 21 chairs (sales price of $510). BUSINESS SOLUTIONS—Computer Furniture Segment Segment Income Statement* For Quarter Ended March 31, 2020 Sales† $ 187,110 Cost of goods sold‡ 140,160 Gross profit 46,950 Expenses Sales commissions (10%) 18,711 Advertising expenses 9,300 Other fixed...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT