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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

4.1 Compute gross profit for April.

	Gross Profit

4.2 Show how to present the inventories on the April 30 balance sheet.

	Inventories Raw materials Work in process Finished goods Total inventories

Answer 1

			Job 306	Job 307	Job 308	April
1)						total
From March
Direct materials			29,000	35,000		64,000
Direct labor			20,000	18,000		38,000
applied overhead			10,000	9,000		19,000
Beginning goods in process			59,000	62,000		121,000
For April
Direct materials			135,000	220,000	100,000	455,000
Direct labor			85,000	150,000	105,000	340,000
applied overhead			42500	75000	52500	170,000
Total costs added in April			262,500	445,000	257,500	965,000
total costs (April 30)			321,500	507,000	257,500	1,086,000
Satus on april 30			fin(sold)	fin(unsold)	in process
April costs included in :			COGS	finished	WIP
				goods
				inventory
2)	TR	General journal				Debit	Credit
	a.	Raw materials inventory				500,000
		Accounts payable					500,000
	b.	Work in process inventory				455,000
		Raw materials inventory					455,000
	c.	Work in process inventory				340,000
		Cash					340,000
	d.	Factory overhead				23,000
		cash					23,000
	e.	Factory overhead				170,000
		work in process inventory					170,000
	f.	Factory overhead				152,000
		Raw materials inventory					50,000
		Cash					51,000
		Accumulated Depreciation					51,000
	g.	finished goods inventory				828,500
		Work in process inventory					828,500
	h.	Cost of goods sold				321,500
		finished goods inventory					321,500
	i.	Cash				635,000
		sales					635,000
	j.	cost of goods sold				5,000
		Factory overhead					5,000
3)		Schedule of goods of goods manufactured
		direct materials used					455,000
		Direct labor used					340,000
		factory overhead applied					170,000
		total manufacturing costs					965,000
		Add:work in process March 31					121,000
		total cost of work in process					1,086,000
		less:work in process April 30					257,500
		cost of goods manufactured					828,500
4)		Gross profit
		sales				635,000
		less cost of goods sold (321500+5000)=				326,500
		Gross profit				308,500
5)		inventories
		Raw materials				75,000
		work in process				257,500
		finished goods				507,000
		total inventories				839,500
	Working notes
		Actual overhead
		indirect material			50,000
		indirect labor			23,000
		depreciation			51,000
		Factory rent			32,000
		factory utilities			19,000
		total			175,000
		overhead applied			170,000
		under applied overhead			5,000
		Raw materials inventory
		beginning raw materials			80,000
		purchased			500,000
		direct materials used			-455,000
		indirect materials used			-50,000
		ending raw materials inventory			75,000