Reference no: EM132325776

Question 1

The Lake Company purchased a machine for $95,000 on January 2. The machine was estimated to have a $3,000 salvage value and a 4 year life.

The machine was depreciated using the straight-line method. During the third year, it was obvious that the machine's total useful life would be 6 years rather than 4, and the salvage at the end of the 6th year would be $1,500. Determine the depreciation expense for the machine for the 6 years of its life.

Question 2

At the end of June, the job cost sheets for Monson Manufacturing show the following total costs accumulated on three custom jobs.

Job 203 Job 204 Job 205

Direct materials $32,000 $47,000 $43,000

Direct labor 18,000 22,000 25,000

Overhead 26,100 31,900 36,250

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 cost of the raw materials requisitioned in June for each of the three jobs?

b. How much direct labor cost is incurred during June for each of the three jobs?

c. What predetermined overhead rate is used during June?

d. How much total cost is transferred to finished goods during June?