Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $550,000, and factory payroll cost in April is $389,000. Overhead costs incurred in April are: indirect materials, $55,000; indirect labor, $29,000; factory rent, $36,000; factory utilities, $24,000; and factory equipment depreciation, $61,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $665,000 cash in April. Costs of the three jobs worked on in April follow.

Balances on March 31
Direct materials		$	27,000			$	41,000
Direct labor			23,000				16,000
Applied overhead			11,500				8,000
Costs during April
Direct materials			137,000				205,000			$	115,000
Direct labor			104,000				152,000				104,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

find the following

Raw materials

Gross Profit

Answer 1

	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	27000	41000		68000
Direct Labor	23,000	16,000		39000
Applied overhead	11,500	8,000		19500
Beginning goods in process	61500	65000	0	126500
For April
Direct Materials	137,000	205,000	115,000	457000
Direct Labor	104,000	152,000	104,000	360000
Applied overhead	52,000	76,000	52,000	180000
Total costs added in April	293,000	433,000	271,000	997,000
Total costs (April 30)	354500	498000	271000	1123500
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
1
Raw materials inventory = 81000+550000-55000-457000= $119000
2
Actual overhead:
Indirect materials	55000
Indirect labor	29000
Factory rent	36000
Factory utilities	24000
factory equipment depreciation	61000
Actual overhead	205000
Underapplied overhead = 205000-180000 = $25000
Adjusted cost of goods sold = 354500+25000=$379500
Sales	665000
Less: Cost of goods sold	379500
Gross profit	285500