# RHCC Manufacturing Company manufactures one product that has several model styles. All materials are

RHCC Manufacturing Company manufactures one product that has several model styles. All materials are added at the beginning of production. Manufacturing overhead is applied as a percentage of direct labor cost. On January 1, 2016, one job, DE31, was in process, with the following accumulated costs: Materials………………………………….\$10,000 Direct labor…………………………………5,000 Manufacturing overhead……………………1,500 Total………………………………………\$16,500 The beginning finished goods inventory for RHCC Manufacturing Company on January 1, 2016, was \$30,000. The following additional data is given for the month of January: Total labor costs incurred………………………………….\$30,000 Total cost of completed Job DE31………………………….21,700 Total materials costs incurred……………………………….22,000 In addition, Job JA01 was begun and completed during the month. Its costs included materials of \$9,500 and labor of \$4,000. Job JA02 was begun during the month and was in process at the end of the month. During the month, sales were \$80,000, and the gross profit rate was 40 percent. INSTRUCTIONS 1. For Jobs DE31, JA01, and JA02, calculate the cost of materials, labor, and overhead for the month of January to find the total cost of each job. 2. Prepare a schedule of cost of goods sold for the month of January. Analyze: On January 1, 2016, RHCC Manufacturing Company established a goal to hold raw materials costs at or below 48 percent of total job costs. Based on your computations, has the company attained this goal? Explain. View Solution:
RHCC Manufacturing Company manufactures one product that has several model