Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. 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, $51,000; indirect labor, $23,000; factory rent, $37,000; factory utilities, $21,000; and factory equipment depreciation, $58,000. 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 308 Balances on March 31 Direct materials $27,000 $45,000 Direct labor 23,000 14,000 Applied overhead 11,500 7,000 Costs during April Direct materials 137,000 210,000 $115,000 Direct labor 101,000 152,000 103,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process

4.2 Show how to present the inventories on the April 30 balance sheet.

raw materials ?

work in process 269,500

finished goods 504,000

Answer 1

Solution:

	Job 306	Job 307	Job 308	April Total
From March:
Direct materials	$27000	$45,000		$72,000
Direct labor	$23,000	$14,000		$37,000
Applied overhead	$11,500	$7,000		$18,500
Beginning goods in process	$61,500	$66,000		$127,500
For April:
Direct materials	$137,000	$210,000	$115,000	$462,000
Direct labor	$101,000	$152,000	$103,000	$356,000
Applied overhead	$50,500	$76,000	$51,500	$178,000
Total costs added in April	$288,500	$438,000	$269,500	$996,000
Total cost (April 30)	$350,000	$504,000	$269,500	$1,123,500
Status on April 30	Finished (sold)	Finished (Unsold)	In process
April 30 cost included in:	Cost of goods sold	Finished goods inventory	Work in process inventory

4.2)

Inventories:
Raw materials inventory ($81,000 + $590,000 - $462,000 - $51,000)	$158,000
Work in process	$269,500
Finished goods	$504,000
Total inventories	$931,500

* If you have any query regarding this question, please ask me.