Question

Required information The following information applies to the questions displayed below.] Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $388,000. Overhead costs incurred in April are: indirect materials, $54,000; indirect labor, $30,000; factory rent, $31,000; factory utilities, $19,000, and factory equipment depreciation, $56,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $630,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 29,000 25,000 12,500 $ 35,000 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 30 135,000 103,000 220,000 152,000 $105,000 103,000 Finished (sold) Finished (unsold) In process

Answer 1

Solution:

Computation of production cost incurred in april and total cost assigned to each job
Particulars	Job 306	Job 307	Job 308	Total
From March:
Direct material	$29,000.00	$35,000.00	$0.00	$64,000.00
Direct labor	$25,000.00	$17,000.00	$0.00	$42,000.00
Applied overhead (50% of direct labor)	$12,500.00	$8,500.00	$0.00	$21,000.00
Beginning Goods in Process	$66,500.00	$60,500.00	$0.00	$1,27,000.00
For April:
Direct material	$1,35,000.00	$2,20,000.00	$1,05,000.00	$4,60,000.00
Direct labor	$1,03,000.00	$1,52,000.00	$1,03,000.00	$3,58,000.00
Applied overhead (50% of direct labor)	$51,500.00	$76,000.00	$51,500.00	$1,79,000.00
Total Cost added in April	$2,89,500.00	$4,48,000.00	$2,59,500.00	$9,97,000.00
Total Costs (April 30)	$3,56,000.00	$5,08,500.00	$2,59,500.00	$11,24,000.00
Status on April 30	Finished (Sold)	Finished (Unsold)	In Process
April 30 cost included in	Cost of goods sold	Finished goods inventory	Work In Process Inventory

Journal Entries - Marcelino Co
Event	Particulars	Debit	Credit
a	Raw material inventory Dr	$5,30,000.00
	To Accounts Payable		$5,30,000.00
	(To record purchase of raw material)
b	Work In Process Dr (135000+220000+105000)	$4,60,000.00
	To Raw material inventory		$4,60,000.00
	(To record raw material used in production)
c	Work In Process Dr (103000+152000+103000)	$3,58,000.00
	To Cash		$3,58,000.00
	(To record direct labor payment and assigment to production)
d	Factory overhead Dr	$30,000.00
	To Cash		$30,000.00
	(To record Indirect labor payment and assigment to factory overhead)
e	Work In Process Dr ($358000*50%)	$1,79,000.00
	To Factory Overhead		$1,79,000.00
	(To apply overhead to production)
f1	Factory Overhead Dr	$54,000.00
	To Raw material inventory		$54,000.00
	(To record indirect material used)
f2	Factory Overhead Dr	$31,000.00
	To Cash		$31,000.00
	(To record factory rent)
f3	Factory Overhead Dr	$19,000.00
	To Cash		$19,000.00
	(To record factory utilities)
f4	Factory Overhead Dr	$56,000.00
	To Accumulated Depreciation		$56,000.00
	(To record factory depreciation)
g	Finished goods inventory Dr (356000+508500)	$8,64,500.00
	To Work In Process		$8,64,500.00
	(Being completed jobs transferred to finished goods)
h	Cost of goods sold Dr	$3,56,000.00
	To Finished goods inventory		$3,56,000.00
	(To record cost of goods sold for Job 306)
i	Cash Dr	$6,30,000.00
	To Sales Revenue		$6,30,000.00
	(To record sales of Job 306)
j	Cost of goods sold Dr	$11,000.00
	To Factory Overhead ($190,000 - $179,000)		$11,000.00
	(To close underapplied overhead to COGS)