Prepare Job-Order Cost Sheets, Predetermined Overhead Rate, Ending Balance of WI
ID: 2419653 • Letter: P
Question
Prepare Job-Order Cost Sheets, Predetermined Overhead Rate, Ending Balance of WIP, Finished Goods, and COGS
At the beginning of June, Rhone Company had two jobs in process, Job 44 and Job 45, with the following accumulated cost information:
$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:
560
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.
Calculate the Cost of Goods Sold for June.
Refer to the list below for the exact wording of text items within your job-order cost sheets.
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
Explanation / Answer
Answer 1. Since the predetermined overhead rate is not given, it must be calculated from BWIP amounts using either Job 44 or Job 45. Using Job 44, Predetermined overhead rate = 780 / 1200 X 100 = 65% (The predetermined overhead rate using Job 45 is identical.) Answer 2. Job 44 Job 45 Job 46 Job 47 Beginning Balance 7,080 6,450 - - Direct Material 2,500 7,110 1,800 1,700 Direct Labor 800 6,400 900 560 Applied Overhead 520 4,160 585 364 Total, June 30 10,900 24,120 3,285 2,624 Answer 3. By the end of June, Jobs 44, 45, and 47 have been transferred out of Work in Process. Thus, the ending balance in Work in Process consists of Job 46. Work In process - June 30 $3,285 While three jobs (44, 45, and 47) were transferred out of Work in Process and into Finished Goods during June, only two jobs remain (Jobs 44 and 47). Finished Goods Job 44 10,900 Job 47 2,624 Total 13,524 Answr 4. One job, Job 45, was sold during June Cost of Goods Sold 24,120