Question

Required information Problem 19-1A 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 $86,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $387,000. Overhead costs incurred in April are: Indirect materials. $60,000, indirect labor, $28,000 factory rent, $38,000; factory utilities, $22,000, and factory equipment depreciation, $53,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $650,000 cash in April. Costs of the three jobs worked on in April follow Job 306 Job 307 Job 388 $ 25,000 22,000 11,000 36,000 15,000 7,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead 139,000 105,000 220,000 151,000 $ 115,800 193,000 Finished In Status on April 30 Finished (unsold) process

Answer 1

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	25000	36000		61000
Direct Labor	22000	15000		37000
Applied overhead	11000	7500		18500
Beginning goods in process	58000	58500	0	116500
For April
Direct Materials	139000	220000	115000	474000
Direct Labor	105000	151000	103000	359000
Applied overhead	52500	75500	51500	179500
Total costs added in April	296500	446500	269500	1012500
Total costs (April 30)	354500	505000	269500	1129000
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	510000
	Accounts Payable		510000
2	Work in Process inventory	474000
	Raw materials inventory		474000
3	Work in Process inventory	359000
	Cash		359000
4	Factory overhead	28000
	Cash		28000
5	Work in Process inventory	179500
	Factory overhead		179500
6	Factory overhead	60000
	Raw materials inventory		60000
7	Factory overhead	22000
	Cash		22000
8	Factory overhead	53000
	Accumulated depreciation -factory equipment		53000
9	Factory overhead	38000
	Cash		38000
10	Finished goods inventory	859500
	Work in Process inventory		859500
11	Cost of goods sold	354500
	Finished goods inventory		354500
12	Cash	650000
	Sales		650000
13	Cost of goods sold	21500
	Factory overhead		21500
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	474000
Direct labor used	359000
Factory overhead applied	179500
Total manufacturing costs	1012500
Add: Work in Process, March 31	116500
Total cost of work in Process	1129000
Less: Work in Process, April 30	269500
Cost of goods manufactured	859500
4.1
Gross Profit	274000
4.2
Inventories
Raw materials	62000	=86000+510000-474000-60000
Work in Process	269500
Finished goods	505000
Total inventories	836500
Workings:
Actual factory overhead:
Indirect materials	60000
Indirect labor	28000
Factory rent	38000
Factory utilities	22000
Factory depreciation equipment	53000
Actual factory overhead	201000
Applied overhead	179500
Underapplied overhead	21500
Sales	650000
Less: Cost of goods sold	354500
Less: Underapplied overhead	21500
Gross Profit	274000