Question

Required information (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 $540,000, and factory payroll cost in April is $378,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $24,000; factory rent, $32,000; factory utilities, $22,000; and factory equipment depreciation, $52,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $670,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 27,000 21,000 10,500 $ 40,000 13,000 6,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 131,000 102,000 210,000 151,000 $115,000 101,000 Finished (sold) Finished (unsold) In process 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).

Answer 1

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	27000	40000		67000
Direct Labor	21000	13000		34000
Applied overhead	10500	6500		17000
Beginning goods in process	58500	59500	0	118000
For April
Direct Materials	131000	210000	115000	456000
Direct Labor	102000	151000	101000	354000
Applied overhead	51000	75500	50500	177000
Total costs added in April	284000	436500	266500	987000
Total costs (April 30)	342500	496000	266500	1105000
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
	General Journal	Debit	Credit
1	Raw materials inventory	540000
	Accounts Payable		540000
2	Work in Process inventory	456000
	Raw materials inventory		456000
3	Work in Process inventory	354000
	Cash		354000
4	Factory overhead	24000
	Cash		24000
5	Work in Process inventory	177000
	Factory overhead		177000
6	Factory overhead	59000
	Raw materials inventory		59000
7	Factory overhead	22000
	Cash		22000
8	Factory overhead	52000
	Accumulated depreciation -factory equipment		52000
9	Factory overhead	32000
	Cash		32000
10	Finished goods inventory	838500
	Work in Process inventory		838500
11	Cost of goods sold	342500
	Finished goods inventory		342500
12	Cash	670000
	Sales		670000
13	Cost of goods sold	12000
	Factory overhead		12000
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	456000
Direct labor used	354000
Factory overhead applied	177000
Total manufacturing costs	987000
Add: Work in Process, March 31	118000
Total cost of work in Process	1105000
Less: Work in Process, April 30	266500
Cost of goods manufactured	838500
4A
Gross Profit	315500
4B
Inventories
Raw materials	111000	=86000+540000-456000-59000
Work in Process	266500
Finished goods	496000
Total inventories	873500
Workings:
Actual factory overhead:
Indirect materials	59000
Indirect labor	24000
Factory rent	32000
Factory utilities	22000
Factory depreciation equipment	52000
Actual factory overhead	189000
Applied overhead	177000
Underapplied overhead	12000
Sales	670000
Less: Cost of goods sold	342500
Less: Underapplied overhead	12000
Gross Profit	315500