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 1. Completed Job 61 2. Started and completed Job 62. 3, Started Job 63. Inventory values 1. Work-in-process inventory (excluding applied overhead): May 31: Job 61 Direct materials Labor (1,070 hours x $35) $ 9.100 37,450 June 30: Job 63 $ 7,500 40,250 Direct materials Labor (1,150 hours x $35) Each job in work-in-process inventory wass 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 $91,000. Cost of goods sold (before adjustment for over- or underapplied overhead): Job 61 Material Labor Overhead 9,100 7 $121,450 Total Job 62 Materials Overhead Total nead was applied to jobs using a predetermined rate per labor dollar that has been used since the company began operations. Direct labor costs charged to jobs in June were $139 000 All labor costs were the same per hour for all laborers for Ju terials purchased in June amounted to $20,600. 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 13,100 Labor for Job No. 62 61,300 $ Overhead for Job No. 62 30.650 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 Material 0 9,100 Labor 74,900 Overhead 37,450 End. bal. 121,450 Work-in-Process Work-in-Process Job No. 62 Job No. 63 Beg, bal. Beg. ba End. bal End. bal. Cost of Goods Sold Cost of Goods Sold Job No. 61 Job No. 62 Beq. bal. Beq. bal. End bal End. bal. Overhead Wages Payable Beg. bal. End. bal. Underapplied Overhead