Question

PROBLEM SET A T connect Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363.000. Overhead costs incurred in April are: indirect materials, $50,000 indirect labor. $23.000; factory rent. S32.000; factory utilities, $19.000, and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow. Problem 2.1A Production costs computed and recorded; reports prepared C2 P1 P2 P3 P4 Job 306 Job 307 Job 308 $ 35,000 $ 29,000 20.000 10.000 18,000 9,000 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 85.000 220,000 150,000 $100,000 105,000 Finished (sold) Finished (unsold) In process Required 1. Determine the total of each production cost incurred for April (direct labor, direct materials, and ap- plied overhead) and the total cost assigned to each job (including the balances from March 31). 2. Prepare journal entries for the month of April to record the following a. Materials purchases (on credit). b. Direct materials used in production c. Direct labor paid and assigned to Work in Process Inventory. d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) g. Transfer of Jobs 306 and 307 to Finished Goods Inventory h. Cost of goods sold for Job 306. i. Revenue from the sale of Job 306. J. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) 3. Prepare a schedule of cost of goods manufactured. 4. Compute gross profit for April. Show how to present the inventories on the April 30 balance sheet Check 2455,000 underapped 13) Cost of goods manufactured, $828,500

4)
how do you calculate cost of good sold could you also explain it.

Answer 1

Solution 1:

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	$20,000.00	$18,000.00	$0.00	$38,000.00
Applied overhead (50% of direct labor)	$10,000.00	$9,000.00	$0.00	$19,000.00
Beginning Goods in Process	$59,000.00	$62,000.00	$0.00	$121,000.00
For April:
Direct material	$135,000.00	$220,000.00	$100,000.00	$455,000.00
Direct labor	$85,000.00	$150,000.00	$105,000.00	$340,000.00
Applied overhead (50% of direct labor)	$42,500.00	$75,000.00	$52,500.00	$170,000.00
Total Cost added in April	$262,500.00	$445,000.00	$257,500.00	$965,000.00
Total Costs (April 30)	$321,500.00	$507,000.00	$257,500.00	$1,086,000.00
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

Solution 2:

Journal Entries - Marcelino Co
Event	Particulars	Debit	Credit
a	Raw material inventory Dr	$500,000.00
	To Accounts Payable		$500,000.00
	(To record purchase of raw material)
b	Work In Process Dr	$455,000.00
	To Raw material inventory		$455,000.00
	(To record raw material used in production)
c	Work In Process Dr	$340,000.00
	To Cash		$340,000.00
	(To record direct labor payment and assigment to production)
d	Factory overhead Dr	$23,000.00
	To Cash		$23,000.00
	(To record Indirect labor payment and assigment to factory overhead)
e	Work In Process Dr	$170,000.00
	To Factory Overhead		$170,000.00
	(To apply overhead to production)
f1	Factory Overhead Dr	$50,000.00
	To Raw material inventory		$50,000.00
	(To record indirect material used)
f2	Factory Overhead Dr	$32,000.00
	To Cash		$32,000.00
	(To record factory rent)
f3	Factory Overhead Dr	$19,000.00
	To Cash		$19,000.00
	(To record factory utilities)
f4	Factory Overhead Dr	$51,000.00
	To Accumulated Depreciation		$51,000.00
	(To record factory depreciation)
g	Finished goods inventory Dr	$828,500.00
	To Work In Process		$828,500.00
	(Being completed jobs transferred to finished goods)
h	Cost of goods sold Dr	$321,500.00
	To Finished goods inventory		$321,500.00
	(To record cost of goods sold for Job 306)
i	Cash Dr	$635,000.00
	To Sales Revenue		$635,000.00
	(To record sales of Job 306)
j	Cost of goods sold Dr	$5,000.00
	To Factory Overhead		$5,000.00
	(To close underapplied overhead to COGS)

Solution 3:

Marcelino company
Schedule of cost of goods manufactured
For the month ended April 30
Particulars	Amount
Direct material	$455,000.00
Direct labor	$340,000.00
Applied overhead (50% of DL Cost)	$170,000.00
Total manufacturing costs	$965,000.00
Add: Beginning WIP	$121,000.00
Total cost of work in process	$1,086,000.00
Less: Ending WIP	$257,500.00
Cost of goods manufactured	$828,500.00

Solution 4a:

Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied overhead
= $321,500 + $5,000 = $326,500
Gross profit = Sales Revenue - Cost of goods sold
=$635,000 - $326,500 = $308,500

Solution 4b:

Inventories - April 30
Particulars	Amount
Raw material inventory ($87,000 + $520,000 - $452,000 - $51,000)	$104,000.00
Work In Process Inventory	$257,500.00
Finished goods inventory	$507,000.00
Total	$868,500.00