Chelsea Household Renovations (CHR) is a rapidly growing company that has not been profitable despite increases in sales It has hired you as a consultant to find ways to improve profitability You believe that the problem results from poor cost control and inaccurate cost estimation on jobs The company has essentially no accounting system from which to collect data You are able, however, to piece together the following information for June Production Completed Job 61 Started and completed Job 62 Started Job 63 Inventory values Work in process inventory (excluding applied overhead) May 31 Job 61 Direct materials $ 9,700 Labor (1,130 hours $35) 39,550 June 30 Job 63 Direct materials $ 8,100 Labor (1,210 hours $35) 42,350 Each job in work in process inventory was exactly 50 percent completed as to labor hours however, all direct materials necessary to do the entire job were charged to each job as soon as it was started There were no direct materials inventories or finished goods inventories at either May 31 or June 30 Actual overhead was $97,000 Cost of goods sold (before adjustment for over or underapplied overhead) Job 61 Material $ 9,700 Labor Overhead Total $ 128,350 Job 62 Materials Labor Overhead Total Overhead was applied to jobs using a predetermined rate per labor dollar that has been used since the company began operations All direct materials were purchased for cash and charged directly to Work in Process Inventory when purchased Direct materials purchased in June amounted to $21,800 Direct labor costs charged to jobs in June were $145,000 All labor costs were the same per hour for all laborers for June Required Calculate the following a The cost elements (material, labor, and overhead) of cost of goods sold before adjustment for over or underapplied overhead for each job sold b The value of each cost element (material, labor, and overhead) for each job in Work in process inventory at June 30 c Over or underapplied overhead for June Complete this question by entering your answers in the tabs below Required A Required B Required The cost elements (material, labor, and overhead) of cost of goods sold before adjustment for over or underapplied overhead for each job sold Materials for Job No 62 Labor for Job No 62 Overhead for Job No 62 Complete this question by entering your answers in the tabs below Required A Required B Required Over or underapplied overhead for June Complete this question by entering your answers in the tabs below Required A Required B Required Over or underapplied overhead for June

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Chelsea Household Renovations (CHR) is a rapidly growing company that has not been profitable despite increases in sales. It has hired you as a consultant

Chelsea Household Renovations (CHR) is a rapidly growing company that has not been profitable despite increases in sales. It has hired you as a consultant to find ways to improve profitability. You believe that the problem results from poor cost control and inaccurate cost estimation on jobs. The company has essentially no accounting system from which to collect data. You are able, however, to piece together the following information for June.

Production

Completed Job 61.
Started and completed Job 62.
Started Job 63.

Inventory values

Work-in-process inventory (excluding applied overhead):

May 31: Job 61
Direct materials	$	9,700
Labor (1,130 hours $35)		39,550

June 30: Job 63
Direct materials	$	8,100
Labor (1,210 hours $35)		42,350

Each job in work-in-process inventory was exactly 50 percent completed as to labor-hours; however, all direct materials necessary to do the entire job were charged to each job as soon as it was started.
There were no direct materials inventories or finished goods inventories at either May 31 or June 30.
Actual overhead was $97,000.
Cost of goods sold (before adjustment for over- or underapplied overhead):

Job 61
Material	$	9,700
Labor		?
Overhead		?
Total	$	128,350

Job 62
Materials	?
Labor	?
Overhead	?
Total	?

Overhead was applied to jobs using a predetermined rate per labor dollar that has been used since the company began operations.
All direct materials were purchased for cash and charged directly to Work-in-Process Inventory when purchased. Direct materials purchased in June amounted to $21,800.
Direct labor costs charged to jobs in June were $145,000. All labor costs were the same per hour for all laborers for June.

Required:

Calculate the following:

a. The cost elements (material, labor, and overhead) of cost of goods sold before adjustment for over- or underapplied overhead for each job sold.

b. The value of each cost element (material, labor, and overhead) for each job in Work-in-process inventory at June 30.

c. Over- or underapplied overhead for June.

image text in transcribed

Complete this question by entering your answers in the tabs below. Required A Required B Required The cost elements (material, labor, and overhead) of cost of goods sold before adjustment for over- or underapplied overhead for each job sold. Materials for Job No. 62 Labor for Job No. 62 Overhead for Job No. 62 Complete this question by entering your answers in the tabs below. Required A Required B Required Over- or underapplied overhead for June. Complete this question by entering your answers in the tabs below. Required A Required B Required Over- or underapplied overhead for June.