Question

Marcelino Co.'s March 31 inventory of raw materials is $90,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $52,000; indirect labor, $26,000; factory rent, $38,000; factory utilities, $24,000; and factory equipment depreciation, $56,000. 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
Balances on March 31
Direct materials		$	30,000			$	39,000
Direct labor			24,000				16,000
Applied overhead			12,000				8,000
Costs during April
Direct materials			131,000				200,000			$	100,000
Direct labor			104,000				154,000				101,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

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.

Answer 1

	S.no	General Journal	Debit	Credit
1	a	Raw Materials Inventory	500000
		Accounts payable		500000
2	b	Work in Process Inventory	431000
		Raw Materials Inventory		431000
		(131000+200000+100000)
3	c	Work in Process Inventory	359000
		Cash		359000
		104000+154000+101000
4	d	Factory overhead	26000
		Cash		26000
5	e	Work in Process Inventory	179500
		Factory overhead		179500
		359000*50%
6	f(1)	Factory overhead	52000
		Raw Materials Inventory		52000
7	f(2)	Factory overhead	24000
		Cash		24000
8	f(3)	Factory overhead	56000
		Accumulated Depreciation- factory equipment		56000
9	f(4)	Factory overhead	38000
		Cash		38000
10	g	Finished goods inventory	847000
		Work in progress inventory		847000
		(30000+24000+12000+131000+104000+52000)+ (39000+16000+8000+200000+154000+77000)
11	h	Cost of goods sold	353000
		Finished goods inventory		353000
12	i	Cash	660000
		Sales		660000
13	j	Cost of goods sold	16500
		Factory Over head		16500
		(179500-52000-26000-38000-24000-56000)