Question

Marcelino Co.'s March 31 inventory of raw materials is $84,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $51,000; indirect labor, $22,000; factory rent, $38,000; factory utilities, $21,000; 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 $ 30,000 21,000 10,500 $ 42,000 19,000 9,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 130,000 101,000 200,000 151,000 $105,000 105,000 Finished (sold) Finished (unsold) In process Required: 1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and th cost assigned to each job (including the balances from March 31). Job 306 Job 307 Job 308 April Total $ 30,000 21.000 10,500 42.000 19.000 9.500 72,000 40,000 20,000 From March Direct Materials Direct Labor Applied overhead Beginning goods in process For April Direct Materials Direct Labor Applied overhead Total costs added in April 130,000 101.000 200.000 151,000 105,000 105,000 435,000 357,000 231.000 351.000 210,000 792,000 Total costs (April 30) 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 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.) 2. Prepare journal entries for the month of April to record the above transactions. 3. Prepare a schedule of cost of goods manufactured. MARCELINO COMPANY Schedule of Cost of Goods Manufactured 4-a. Compute gross profit for April. For Month Ended April 30 4-b. Show how to present the inventories on the April 30 balance sheet. Direct materials used Direct labor used Complete this question by entering your answers in the tabs below. Factory overhead applied Total manufacturing costs Required 4A Required 48 Less: Work in process April 30 Total cost of work in process Compute gross profit for April Less: Underapplied overhead Cost of goods manufactured $ Gross profit 4-a. Compute gross profit for April 4-b. Show how to present the inventories on the April 30 balance sheet Complete this question by entering your answers in the tabs below. Required Required 43 Show how to present the inventories on the April 30 balance sheet. Inventories Raw materiais Work in process Finished goods Total inventories

Answer 1

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	30000	42000		72000
Direct Labor	21000	19000		40000
Applied overhead	10500	9500		20000
Beginning goods in process	61500	70500	0	132000
For April
Direct Materials	130000	200000	105000	435000
Direct Labor	101000	151000	105000	357000
Applied overhead	50500	75500	52500	178500
Total costs added in April	281500	426500	262500	970500
Total costs (April 30)	343000	497000	262500	1102500
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	520000
	Accounts Payable		520000
2	Work in Process inventory	435000
	Raw materials inventory		435000
3	Work in Process inventory	357000
	Cash		357000
4	Factory overhead	22000
	Cash		22000
5	Work in Process inventory	178500
	Factory overhead		178500
6	Factory overhead	51000
	Raw materials inventory		51000
7	Factory overhead	21000
	Cash		21000
8	Factory overhead	56000
	Accumulated depreciation -factory equipment		56000
9	Factory overhead	38000
	Cash		38000
10	Finished goods inventory	840000
	Work in Process inventory		840000
11	Cost of goods sold	343000
	Finished goods inventory		343000
12	Cash	630000
	Sales		630000
13	Cost of goods sold	9500
	Factory overhead		9500
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	435000
Direct labor used	357000
Factory overhead applied	178500
Total manufacturing costs	970500
Add: Work in Process, March 31	132000
Total cost of work in Process	1102500
Less: Work in Process, April 30	262500
Cost of goods manufactured	840000
4A
Gross Profit	277500
4B
Inventories
Raw materials	118000	=84000+520000-435000-51000
Work in Process	262500
Finished goods	497000
Total inventories	877500
Workings:
Actual factory overhead:
Indirect materials	51000
Indirect labor	22000
Factory rent	38000
Factory utilities	21000
Factory depreciation equipment	56000
Actual factory overhead	188000
Applied overhead	178500
Underapplied overhead	9500
Sales	630000
Less: Cost of goods sold	343000
Less: Underapplied overhead	9500
Gross Profit	277500