Question

Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $600,000, and factory payroll cost in April is $390,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $29,000; factory rent, $34,000; factory utilities, $21,000; and factory equipment depreciation, $61,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $670,000 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		$	28,000			$	39,000
Direct labor			24,000				18,000
Applied overhead			12,000				9,000
Costs during April
Direct materials			133,000				220,000			$	115,000
Direct labor			105,000				154,000				102,000
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).

2. Prepare journal entries for the month of April to record the below transactions. (Hint, there are 13 steps)

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.)

Job 306 Job 307 Job 308 April Total From March Direct Materials $28,000 $39,000 $67,000 Direct Labor 24,000 18,000 42,000 Applied overhead 12,000 9,000 21,000 Beginning goods in process $0 For April Direct Materials 133,000 220,000 115,000 468,000 Direct Labor 105,000 154,000 102,000 361,000 Applied overhead 0 Total costs added in April 238,000 374,000 217,000 829,000 Total costs (April 30) $0 Status on April 30 Finished (sold) Finished (unsold) In process April 30 cost included in:

Answer 1

ans 1		Job 306	Job 307	Job 308	April Total
	From March
	Direct Materials	$28,000	$39,000		$67,000
	Direct Labor	24,000	18,000		42,000
	Applied overhead	12,000	9,000		21,000
	Beginning goods in process B	$64,000	$66,000		$130,000
	For April
	Direct Materials	133,000	220,000	115,000	468,000
	Direct Labor D	105,000	154,000	102,000	361,000
	Applied overhead (50%*D)	52500	77000	51000	180500
	Total costs added in April T	290,500	451,000	268,000	1,009,500
	Total costs (April 30) B+T	$354,500	$517,000	$268,000	$1,139,500
	Status on April 30	Finished (sold)	Finished (unsold)	In process
	April 30 cost included in:
Transa	Accounst Title	Dr	Cr
a	Raw Material Inventory	600000
	Accounts payable		600000
b)	Work in Process Inventory	468,000
	Raw material Inventory		468,000
c)	Factory wages	361000
	Cash		361000
	Work in Process Inventory	361,000
	Factory wages		361,000
d)	Factory wages	29000
	Cash		29000
	Factory Overhead	180500
	Factory wages		180500
e	Work in Process Inventory	180500
	Factory Overhead		180500
f	Factory Overhead	$175,000
	Raw material Inventory		$59,000
	Cash (34000+21000)		55000
	Accumulated depreciation-Factory equipment		61000
g	Finished Goods Inventory	$871,500
	Work in Process Inventory		$871,500
h	Cost of Good sold	238000
	Finished Goods Inventory		238000
g	Accounts Receivable	670000
	Sales		670000