Question

Riverstone Mining Equipment manufactures parts for heavy mining equipment to order. Each part is custom made to match the requirements of a range of heavy mining machinery.

On 1 June 2020, Riverstone Mining Equipment had three jobs in process for Goonyella, Clermont and Emerald mines, as the following table shows:

	Goonyella	Clermont	Emerald
Direct Materials	$3,100.00	$7,150.00	$2,100.00
Direct Labour	$4,400.00	$4,600.00	$1,500.00
Applied Overhead	$4,840.00	$5,060.00	$1,650.00

During the month of June 2020, two more jobs were started for Moura and Blackwater mines. The materials and labour costs incurred for each job in June 2020 are shown below:

	Goonyella	Clermont	Emerald	Moura	Blackwater
Direct Materials	$6,000.00	$5,500.00	$7,700.00	$2,310,000.00	$2,200.00
Direct Labour	$4,000.00	$3,500.00	$3,400.00	$2,200,000.00	$3,500.00

By the end of June 2020, the jobs for Goonyella and Emerald were completed and sold.

Required:

If overhead is applied on the basis of direct labour dollars, calculate the plant-wide overhead rate to four decimal places.What is the ending Work in Process balance for 30 June 2020? What is the Cost of Goods Sold for June 2020?

Answer 1

The answer has been presented in the supporting sheet.