Question

Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

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Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $58,000; 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 $685,000 cash in April. Costs of the three jobs worked on in April follow.

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	29,000			$	41,000
Direct labor			21,000				13,000
Applied overhead			10,500				6,500
Costs during April
Direct materials			132,000				205,000			$	100,000
Direct labor			104,000				152,000				100,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

rev: 03_15_2018_QC_CS-121813

Problem 15-1A Part 2

1. Materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid and assigned to Work in Process Inventory.
4. Indirect labor paid and assigned to Factory Overhead.
5. Overhead costs applied to Work in Process Inventory.
6. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
8. Cost of goods sold for Job 306.
9. Revenue from the sale of Job 306.
10. 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.

Journal entry worksheet

Answer 1

Job Cost sheet:
			Job 306	Job 307	Job 308	Total
Beginning Balance			60500	60500		121000
Add: Current cost
Material			132000	205000	100000	437000
Labour			104000	152000	100000	356000
Overheads	(50% f DLC )		52000	76000	50000	178000
Total Cost			348500	493500	250000	1092000
Journal entries:
S.no.	Accounts title and explanations				Debit $	Credit $
a.	Raw material inventories				590000
	Accounts payable					590000
b.	Work in process-Job 306				132000
	Work in process-Job 307				205000
	Work in process-Job 308				100000
	Raw material inventory					437000
c.	Work in process-Job 306				104000
	Work in process-Job 307				152000
	Work in process-Job 308				100000
	cash account					356000
d.	Manufacturing Overheads				23000
	Cash account					23000
e.	Work in process-Job 306				52000
	Work in process-Job 307				56000
	Work in process-Job 308				50000
	Manufacturing overheads					158000
f.	Manufacturing overheads				167000
	Raw material inventory					58000
	Cash (36000+21000)					57000
	Accumulated depreciation					52000
g.	Finished Goods inventory				842000
	Work in process (348500+493500)					842000
h.	Cost of good ssold				348500
	Finished Goods inventory					348500
i.	Cash accoount				685000
	Sales revenue					685000
j.	Cost of goods sold				32000
	Manufacturing overheads (23000+167000-158000)					32000