At the end of June, job cost sheets for Kennedy Manufacturing show the following total costs accumulated on three custom jobs:
Job 203 was started in production in May and the following costs were assigned to it in May: direct materials, $12,000; direct labor, $6,000; and overhead $8,700. Jobs 204 and 205 are started in June. Overhead cost is applied with a predetermined rate based on direct labor cost. Jobs 203 and 204 are finished in June, and Job 205 will be finished in July. No raw materials are used indirectly in June. Using this information, answer the following questions assuming the company's predetermined overhead rate did not change.
a. What is the total cost of direct materials requisitioned in June for the three jobs?
b. What is the total direct labor cost incurred during June for the three jobs?
c. What predetermined overhead rate is used during June?
d. How much total cost is transferred to finished goods during June?
Definitions:
Business Model
A framework outlining how a company creates, delivers, and captures value within its operational context.
Evidence
Information or facts that are used to support the validity of a statement, theory, or finding.
Infrastructure
The resources (people, technology, products, suppliers, partners, facilities, cash, etc.) that an entrepreneur must have in order to deliver the Customer Value Proposition (CVP).
Financial Viability
Defines the revenue and cost structures a business needs to meet its operating expenses and financial obligations.
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