Question

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Problem 02-1A Production costs computed and recorded; reports prepared LO P1, P2, P3, P4

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Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $373,000. Overhead costs incurred in April are: indirect materials, $51,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $25,000; and factory equipment depreciation, $57,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $695,000 cash in April. Costs of the three jobs worked on in April follow.

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	31,000			$	41,000
Direct labor			22,000				17,000
Applied overhead			11,000				8,500
Costs during April
Direct materials			133,000				200,000			$	105,000
Direct labor			101,000				151,000				101,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).
  

Answer 1

	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	$       31,000	$    41,000		$       72,000
Direct Labour	$       22,000	$    17,000		$       39,000
Applied Overheads	$       11,000	$       8,500		$       19,500
Beginning goods in process	$       64,000	$    66,500	0	$   1,30,500
For April
Direct Materials	$   1,33,000	$ 2,00,000	$ 1,05,000	$   4,38,000
Direct Labour	$   1,01,000	$ 1,51,000	$ 1,01,000	$   3,53,000
Applied Overheads	$       50,500	$    75,500	$     50,500	$   1,76,500
Total cost added in April	$   2,84,500	$ 4,26,500	$ 2,56,500	$   9,67,500
Total cost (April 30)	$   3,48,500	$ 4,93,000	$ 2,56,500	$ 10,98,000
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

Notes :
For April
Applied Overheads	=	Direct Labour X 50%
Total cost (April 30)	=	Beginning goods in process + Total cost added in April