Question

Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4 [The following information applies to the questions displayed below.] Marcelino Co.'s March 31 inventory of raw materials is $83,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $378,000. Overhead costs incurred in April are: indirect materials, $54,000; indirect labor, $23,000; factory rent, $36,000; factory utilities, $21,000; and factory equipment depreciation, $52,000. 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 24,000 12,000 $ 43,000 18,000 9,000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead 137,000 101,000 220,000 151,000 $ 115,000 103,000 ? ? Status on April 30 Finished (sold) Finished (unsold) In process

Answer 1

Answer-

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	27,000	43,000		70,000
Direct Labor	24,000	18,000		42,000
Applied overhead	12,000	9,000		21,000
Beginning goods in process	63,000	70,000	0	133,000
For April
Direct Materials	137,000	220,000	115,000	472,000
Direct Labor	101,000	151,000	103,000	355,000
Applied overhead	50,500	75,500	51,500	177,500
Total costs added in April	288,500	446,500	269,500	1,004,500
Total costs (April 30)	351,500	516,500	269,500	1,137,500
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	530,000
	Accounts Payable		530,000
2	Work in Process inventory	472,000
	Raw materials inventory		472,000
3	Work in Process inventory	355,000
	Cash		355,000
4	Factory overhead	23000
	Cash		23000
5	Work in Process inventory	177,500
	Factory overhead		177,500
6	Factory overhead	54,000
	Raw materials inventory		54,000
7	Factory overhead	21,000
	Cash		21,000
8	Factory overhead	52,000
	Accumulated depreciation -factory equipment		52,000
9	Factory overhead	36,000
	Cash		36,000
10	Finished goods inventory	868,000
	Work in Process inventory		868,000
11	Cost of goods sold	351,500
	Finished goods inventory		351,500
12	Cash	660,000
	Sales		660,000
13	Cost of goods sold	8,500
	Factory overhead		8,500
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	472,000
Direct labor used	355,000
Factory overhead applied	177,500
Total manufacturing costs	1,004,500
Add: Work in Process, March 31	133,000
Total cost of work in Process	1,137,500
Less: Work in Process, April 30	269,500
Cost of goods manufactured	868,000
4.1
Gross Profit	300,000
4.2
Inventories
Raw materials	87,000	=83,000+530,000-472,000-54,000
Work in Process	269,500
Finished goods	516,500
Total inventories	873,000
Workings:
Actual factory overhead:
Indirect materials	54,000
Indirect labor	23,000
Factory rent	36,000
Factory utilities	21,000
Factory depreciation equipment	52,000
Actual factory overhead	186,000
Applied overhead	177,500
Underapplied overhead	8,500
Sales	660,000
Less: Cost of goods sold	351,500
Less: Underapplied overhead	8,500
Gross Profit	300,000