Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $378,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $25,000; factory rent, $38,000; factory utilities, $22,000; and factory equipment depreciation, $60,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $665,000 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		$	26,000			$	43,000
Direct labor			23,000				19,000
Applied overhead			11,500				9,500
Costs during April
Direct materials			134,000				215,000			$	120,000
Direct labor			101,000				151,000				101,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

rev: 03_15_2018_QC_CS-121813

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

	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	26000	43000		69000
Direct Labor	23000	19000		42000
Applied overhead	11500	9500		21000
Beginning goods in process	60500	71500	0	132000
For April
Direct Materials	134000	215000	120000	469000
Direct Labor	101000	151000	101000	353000
Applied overhead	50500	75500	50500	176500
Total costs added in April	285500	441500	271500	998500
Total costs (April 30)	346000	513000	271500	1130500
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
Journal entries:
2
		Debit	Credit
1	Raw materials inventory	570000
	Accounts Payable		570000
2	Work in Process inventory	469000
	Raw materials inventory		469000
3	Work in Process inventory	353000
	Cash		353000
4	Factory overhead	25000
	Cash		25000
5	Work in Process inventory	176500
	Factory overhead		176500
6	Factory overhead	50000
	Raw materials inventory		50000
7	Factory overhead	22000
	Cash		22000
8	Factory overhead	60000
	Accumulated depreciation-factory equipment		60000
9	Factory overhead	38000
	Cash		38000
10	Finished goods inventory	859000
	Work in Process inventory		859000
11	Cost of goods sold	346000
	Finished goods inventory		346000
12	Cash	665000
	Sales		665000
13	Cost of goods sold	18500
	Factory overhead		18500
	Workings:
	Actual factory overhead:
	Indirect materials	50000
	Indirect labor	25000
	Factory rent	38000
	Factory utilities	22000
	Factory depreciation equipment	60000
	Actual factory overhead	195000
	Applied overhead	176500
	Underapplied overhead	18500