Question

Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $23,000; factory rent, $32,000; factory utilities, $19,000; and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 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		$	29,000			$	35,000
Direct labor			20,000				18,000
Applied overhead			10,000				9,000
Costs during April
Direct materials			135,000				220,000			$	100,000
Direct labor			85,000				150,000				105,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process
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

	Accounts and Titles	Debit	Credit
a)	Raw Material Inventory	$500,000.00
	Accounts Payable		$500,000.00
b)	Work in process inventory	$455,000.00
	Raw Material Inventory		$455,000.00
c)	Work in process inventory	$340,000.00
	Cash		$340,000.00
d)	Factory Overhead	$23,000.00
	Cash		$23,000.00
e)	Work in process inventory	$170,000.00
	Factory Overhead		$170,000.00
f) 1	Factory Overhead	$50,000.00
	Raw Material Inventory		$50,000.00
f ) 2	Factory Overhead	$19,000.00
	Cash		$19,000.00
f) 3	Factory Overhead	$51,000.00
	Accumulated Depreciation--Factory Equipment		$52,000.00
f) 4	Factory Overhead	$32,000.00
	Cash		$32,000.00
g)	Finished Goods Inventory	$828,500.00
	Work in process inventory		$828,500.00
h)	Cost of Good sold	$321,500.00
	Finished Goods Inventory		$321,500.00
i)	Cash	$635,000.00
	Sales		$635,000.00
j	Cost of Good sold	$5,000.00
	Factory Overhead		$5,000.00
	Job 306	Job 307	Job 308	Total
Balances on March 31
Direct materials	$29,000.00	$35,000.00		$64,000.00
Direct labor	$20,000.00	$18,000.00		$38,000.00
Applied overhead	$10,000.00	$9,000.00		$19,000.00
Beginning goods in process	$59,000.00	$62,000.00	$0.00	$121,000.00
Costs during April
Direct materials	$135,000.00	$220,000.00	$100,000.00	$455,000.00
Direct labor	$85,000.00	$150,000.00	$105,000.00	$340,000.00
Applied overhead	$42,500.00	$75,000.00	$52,500.00	$170,000.00
Total Cost added in april	$262,500.00	$445,000.00	$257,500.00	$965,000.00
Total costs (April 30)	$321,500.00	$507,000.00	$257,500.00	$1,086,000.00
Status on April 30	Finished (sold)	Finished (unsold)	In process