Question

Required information Problem 15-1A Production costs computed and recorded; reports prepared LO P1, P2, P3, P4 (The following information applies to the questions displayed below.) Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $381,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $26,000; factory rent, $32,000; factory utilities, $22,000; and factory equipment depreciation, $58,000. 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 $ 26,000 25,000 12,500 $ 44,000 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 30 130,000 100,000 200,000 151,000 $110,000 104,000 Finished (sold) Finished (unsold) In process

Answer 1

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	26000	44000		70000
Direct Labor	25000	13000		38000
Applied overhead	12500	6500		19000
Beginning goods in process	63500	63500	0	127000
For April
Direct Materials	130000	200000	110000	440000
Direct Labor	100000	151000	104000	355000
Applied overhead	50000	75500	52000	177500
Total costs added in April	280000	426500	266000	972500
Total costs (April 30)	343500	490000	266000	1099500
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	570000
	Accounts Payable		570000
2	Work in Process inventory	440000
	Raw materials inventory		440000
3	Work in Process inventory	355000
	Cash		355000
4	Factory overhead	26000
	Cash		26000
5	Work in Process inventory	177500
	Factory overhead		177500
6	Factory overhead	56000
	Raw materials inventory		56000
7	Factory overhead	22000
	Cash		22000
8	Factory overhead	58000
	Accumulated depreciation -factory equipment		58000
9	Factory overhead	32000
	Cash		32000
10	Finished goods inventory	833500
	Work in Process inventory		833500
11	Cost of goods sold	343500
	Finished goods inventory		343500
12	Cash	670000
	Sales		670000
13	Cost of goods sold	16500
	Factory overhead		16500
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	440000
Direct labor used	355000
Factory overhead applied	177500
Total manufacturing costs	972500
Add: Work in Process, March 31	127000
Total cost of work in Process	1099500
Less: Work in Process, April 30	266000
Cost of goods manufactured	833500
4.1
Gross Profit	310000
4.2
Inventories
Raw materials	156000	=82000+570000-440000-56000
Work in Process	266000
Finished goods	490000
Total inventories	912000
Workings:
Actual factory overhead:
Indirect materials	56000
Indirect labor	26000
Factory rent	32000
Factory utilities	22000
Factory depreciation equipment	58000
Actual factory overhead	194000
Applied overhead	177500
Underapplied overhead	16500
Sales	670000
Less: Cost of goods sold	343500
Less: Underapplied overhead	16500
Gross Profit	310000