Question

Required information Problem 15-1A Production costs computed and recorded; reports prepared LO P1, P2, P3, P4 [The following information applies to the questions displayed below.] Marcelino Co.'s March 31 inventory of raw materials is $86,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $387.000. Overhead costs incurred in April are: indirect materials, $55,000 $29,000; factory rent, $34.000; factory utilities, $21,000; and factory equipment depreciation, $55,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $660,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 27,000 2 1,000 10,500 $ 41,000 17,000 8,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 139,000 103.000 205,000 152,000 $110,000 103,000 Finished (sold) Pinished (unsold) process Problem 15-1A Part 1 Required: 1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). Job 306 Job 307 Job 308 April Total

Answer 1

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	27000	41000		68000
Direct Labor	21000	17000		38000
Applied overhead	10500	8500		19000
Beginning goods in process	58500	66500	0	125000
For April
Direct Materials	139000	205000	110000	454000
Direct Labor	103000	152000	103000	358000
Applied overhead	51500	76000	51500	179000
Total costs added in April	293500	433000	264500	991000
Total costs (April 30)	352000	499500	264500	1116000
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 cost included in:	Cost of goods sold	Finished goods inventory	Goods in process inventory
2
		Debit	Credit
1	Raw materials inventory	530000
	Accounts Payable		530000
2	Work in Process inventory	454000
	Raw materials inventory		454000
3	Work in Process inventory	358000
	Cash		358000
4	Factory overhead	29000
	Cash		29000
5	Work in Process inventory	179000
	Factory overhead		179000
6	Factory overhead	55000
	Raw materials inventory		55000
7	Factory overhead	21000
	Cash		21000
8	Factory overhead	55000
	Accumulated depreciation -factory equipment		55000
9	Factory overhead	34000
	Cash		34000
10	Finished goods inventory	851500
	Work in Process inventory		851500
11	Cost of goods sold	352000
	Finished goods inventory		352000
12	Cash	660000
	Sales		660000
13	Cost of goods sold	15000
	Factory overhead		15000
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	454000
Direct labor used	358000
Factory overhead applied	179000
Total manufacturing costs	991000
Add: Work in Process, March 31	125000
Total cost of work in Process	1116000
Less: Work in Process, April 30	264500
Cost of goods manufactured	851500
4A
Gross Profit	293000
4B
Inventories
Raw materials	107000	=86000+530000-454000-55000
Work in Process	264500
Finished goods	499500
Total inventories	871000
Workings:
Actual factory overhead:
Indirect materials	55000
Indirect labor	29000
Factory rent	34000
Factory utilities	21000
Factory depreciation equipment	55000
Actual factory overhead	194000
Applied overhead	179000
Underapplied overhead	15000
Sales	660000
Less: Cost of goods sold	352000
Less: Underapplied overhead	15000
Gross Profit	293000