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 inaccurate cost estimation on jobs. The company has essentially no accounting system from which to collect data. ou are able however to pic teter the followininformation for lune Production 1. Completed Job 61 2. Started and completed Job 62. 3. Started Job 63. Inventory values 1. Work-in-process inventory (excluding applied overhead) : Job 6 Direct materials Labor (1,160 hours $35) $10,000 40,600 June 30: Job 63 $ 8,400 Labor (1 240 hours x $35) 43,400 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 teither May 31 or June 30. There were no direct materials inventories or finished goods inventories Actual overhead was $100,000. Cost of goods sold (before adjustment for over- or underapplied overhead): Job 6 Material 10,000 Labor ? ? Overhead Total $131,800 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 $22,400. Direct labor costs charged to jobs in June were $148,000. All labor costs were the same per hour for all laborers for June. Required: Write a report to management to show a. 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 b. The value of each cost element (Material(M), Labor(L), and Overhead(O)) for each job in Work-in-process inventory at June 30. Cash or Accounts Payable Work-in-Process Job No. 61 Beg. bal. Current costs End. bal. Work-in-Process Work-in-Process Job No. 63 Job No. 62 Beg. bal. Beg. bal. End. bal. End. bal. Cost of Goods Sold Cost of Goods Sold Job No. 61 Job No. 62 Beg. bal. Beg. bal End. bal End, bal. Overhead Wages Payable Beg. bal. End, bal. Underapplied Overhead c. Over- or underapplied overhead for June. Overapplied overhead Underapplied overhead 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 inaccurate cost estimation on jobs. The company has essentially no accounting system from which to collect data. ou are able however to pic teter the followininformation for lune Production 1. Completed Job 61 2. Started and completed Job 62. 3. Started Job 63. Inventory values 1. Work-in-process inventory (excluding applied overhead) : Job 6 Direct materials Labor (1,160 hours $35) $10,000 40,600 June 30: Job 63 $ 8,400 Labor (1 240 hours x $35) 43,400 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 teither May 31 or June 30. There were no direct materials inventories or finished goods inventories Actual overhead was $100,000. Cost of goods sold (before adjustment for over- or underapplied overhead): Job 6 Material 10,000 Labor ? ? Overhead Total $131,800 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 $22,400. Direct labor costs charged to jobs in June were $148,000. All labor costs were the same per hour for all laborers for June. Required: Write a report to management to show a. 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 b. The value of each cost element (Material(M), Labor(L), and Overhead(O)) for each job in Work-in-process inventory at June 30. Cash or Accounts Payable Work-in-Process Job No. 61 Beg. bal. Current costs End. bal. Work-in-Process Work-in-Process Job No. 63 Job No. 62 Beg. bal. Beg. bal. End. bal. End. bal. Cost of Goods Sold Cost of Goods Sold Job No. 61 Job No. 62 Beg. bal. Beg. bal End. bal End, bal. Overhead Wages Payable Beg. bal. End, bal. Underapplied Overhead c. Over- or underapplied overhead for June. Overapplied overhead Underapplied overhead