Question

Required information The following information applies to the questions displayed below. 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, $32,000; 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. Job 308 Job 307 Job 306 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead $ 35,000 18,000 9,000 $ 29,000 20,000 10,000 $100,000 105,000 220,000 150,000 135,000 85.000 7 2 Finished Finished In Status on April 30 (unsold) (sold) process 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.)

Answer 1

Transaction	General journal	Debit	Credit
a	Raw Material Inventory	500000
	Accounts Payable		500000
b	Work in process inventory	455000
	Raw Material Inventory		455000
c	Work in process inventory	340000
	Cash		340000
d	Factory Overhead	23000
	Cash		23000
e	Work in process inventory	170000
	Factory Overhead		170000
f (1)	Factory Overhead	50000
	Raw Material Inventory		50000
f (2)	Factory Overhead	19000
	Cash		19000
f (3)	Factory Overhead	51000
	Accumulated depreciation - Factory equipment		51000
f (4)	Factory Overhead	32000
	Cash		32000
g	Finished goods inventory	828500
	Work in process inventory		828500
h	Cost of goods sold	321500
	Finished goods inventory		321500
i	Cash	635000
	Sales		635000
j	Cost of goods sold	5000
	Factory Overhead		5000

g = 507000 + 321500 = 828500

j

Overhead applied to jobs		170000
Overhead incurred
Indirect material	50000
Indirect labor	23000
Factory Rent	32000
Factory utilities	19000
Factory Equip. Depreciation	51000	175000
Underapplied overhead		5000