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 $ 44,000 $ 54,000 $ 53,000 Direct labor 16,000 30,000 41,000 Overhead applied 5,280 9,900 13,530 Job 102 was started in production in May, and the following costs were assigned to it in May: direct materials, $11,000; direct labor, $3,400; and overhead, $1,122. Jobs 103 and 104 were started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 102 and 103 were finished in June, and Job 104 is expected to be finished in July. No raw materials were 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 table below to calculate the cost of the raw materials

Answer 1

1.   The cost of direct materials requisitioned in the month equals the total direct materials costs accumulated on the three jobs less the amount of direct materials cost assigned to Job 102 in May:

Job 102 ........................................................................	$44,000
Less prior costs.............................................................	(11,000)	$33,000
Job 103 ........................................................................		54,000
Job 104 ........................................................................		53,000
Total materials used (requisitioned).............................		$140,000

2.   Direct labor cost incurred in the month equals the total direct labor costs accumulated on the three jobs less the amount of direct labor cost assigned to Job 102 in May:

Job 102 ........................................................................	$16,000
Less prior costs.............................................................	(3,400)	$12,600
Job 103 ........................................................................		30,000
Job 104 ........................................................................		41,000
Total direct labor..........................................................		$83,600