Solutions15.doc - Exercise 15-3 1 The cost of direct...

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Exercise 15-3 1.The cost of direct materials requisitioned in the month equals the totaldirect materials costs accumulated on the three jobs less the amount ofdirect materials cost assigned to Job 102 in May:Job 102 ............................................................$15,000Less prior costs..............................................(6,000)$ 9,000Job 103 ............................................................33,000Job 104 ............................................................27,000Total materials used (requisitioned)..............$69,0002.Direct labor cost incurred in the month equals the total direct laborcosts accumulated on the three jobs less the amount of direct labor costassigned to Job 102 in May:Job 102 .................................................................$8,000Less prior costs...................................................(1,800)$ 6,200Job 103 .................................................................14,200Job 104 .................................................................21,000Total direct labor..................................................$41,4003.The predetermined overhead rate equals the ratio of the amount ofoverhead assigned to jobs divided by the amount of direct labor costassigned to them. Since the same rate is used for all jobs started andcompleted within a month, the ratio for any one job equals the rate thatwas applied. This table shows the ratio for jobs 102 and 104:Job 102Job 104Overhead...............................................................$ 4,000$10,500Direct labor...........................................................8,00021,000Ratio......................................................................50%50%4.The cost transferred to finished goods in June equals the total costs ofthe two completed jobs for the month, which are Jobs 102 and 103: Job 102Job 103TotalDirect materials................................$15,000$33,000$48,000Direct labor.......................................8,00014,20022,200Overhead...........................................4,0007,10011,100Total transferred cost......................$27,000$54,300$81,300

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