Question

Problem 15-1A 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 $85,000. Raw materials purchases in April are $550,000, and factory payroll cost in April is $367,000. Overhead costs incurred in April are: indirect materials, $57,000; indirect labor, $29,000; factory rent, $34,000; 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 $630,000 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		$	31,000			$	35,000
Direct labor			21,000				18,000
Applied overhead			10,500				9,000
Costs during April
Direct materials			130,000				205,000			$	110,000
Direct labor			105,000				152,000				100,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process
Problem 15-1A Part 2 Materials purchases (on credit). Direct materials used in production. Direct labor paid and assigned to Work in Process Inventory. Indirect labor paid and assigned to Factory Overhead. Overhead costs applied to Work in Process Inventory. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) Transfer of Jobs 306 and 307 to Finished Goods Inventory. Cost of goods sold for Job 306. Revenue from the sale of Job 306. 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

	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	31000	35000		66000
Direct Labor	21000	18000		39000
Applied overhead	10500	9000		19500
Beginning goods in process	62500	62000	0	124500
For April
Direct Materials	130000	205000	110000	445000
Direct Labor	105000	152000	100000	357000
Applied overhead	52500	76000	50000	178500
Total costs added in April	287500	433000	260000	980500
Total costs (April 30)	350000	495000	260000	1105000
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

Transaction	General Journal	Debit	Credit
a	Raw materials inventory	550000
	Account Payable		550000
b	Work in process inventory	445000
	Raw materials inventory		4450000
c	Work in process inventory	357000
	Cash		357000
d	Factory overhead	29000
	Cash		29000
e	Work in process inventory	1785000
	Factory overhead		1785000
F(1)	Factory overhead	57000
	Raw materials inventory		57000
F(2)	Factory overhead	22000
	Cash		22000
F(3)	Factory overhead	53000
	Accumulated depreciation- factory equipment		53000
F(4)	Factory overhead	34000
	Cash		34000
g	Finished goods inventory	845000
	Work in process inventory		845000
h	Cost of goods sold	350000
	Finished goods inventory		350000
i	Cash	630000
	Sales		630000
j	Cost of goods sold	18500
	Factory overhead		18500

Explanation:

g. 350000 + 495000 = 845000

j. 178500 – (57000 + 29000 + 34000 +24000 + 53000) = 18500