Question

Marcelino Co.'s March 31 inventory of raw materials is $89,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $388,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $27,000; factory rent, $36,000; factory utilities, $21,000; 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		$	32,000			$	35,000
Direct labor			23,000				18,000
Applied overhead			11,500				9,000
Costs during April
Direct materials			139,000				210,000			$	110,000
Direct labor			103,000				154,000				104,000
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

2
	General Journal	Debit	Credit
1	Raw materials inventory	510000
	Accounts Payable		510000
2	Work in Process inventory	459000
	Raw materials inventory		459000
3	Work in Process inventory	361000
	Cash		361000
4	Factory overhead	27000
	Cash		27000
5	Work in Process inventory	180500
	Factory overhead		180500
6	Factory overhead	56000
	Raw materials inventory		56000
7	Factory overhead	21000
	Cash		21000
8	Factory overhead	53000
	Accumulated depreciation- factory equipment		53000
9	Factory overhead	36000
	Cash		36000
10	Finished goods inventory	863000
	Work in Process inventory		863000
11	Cost of goods sold	360000
	Finished goods inventory		360000
12	Cash	630000
	Sales		630000
13	Cost of goods sold	12500
	Factory overhead		12500
Workings:
From March
Direct Materials	32000	35000		67000
Direct Labor	23000	18000		41000
Applied overhead	11500	9000		20500
Beginning goods in process	66500	62000	0	128500
For April
Direct Materials	139000	210000	110000	459000
Direct Labor	103000	154000	104000	361000
Applied overhead	51500	77000	52000	180500
Total costs added in April	293500	441000	266000	1000500
Total costs (April 30)	360000	503000	266000	1129000
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
	Actual factory overhead:
	Indirect materials	56000
	Indirect labor	27000
	Factory rent	36000
	Factory utilities	21000
	Factory depreciation equipment	53000
	Actual factory overhead	193000
	Applied overhead	180500
	Underapplied overhead	12500