Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $386,000. Overhead costs incurred in April are: indirect materials, $57,000; indirect labor, $26,000; factory rent, $40,000; factory utilities, $20,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $645,000 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			25,000				17,000
Applied overhead			12,500				8,500
Costs during April
Direct materials			135,000				205,000			$	115,000
Direct labor			104,000				152,000				104,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

4-a. Compute gross profit for April.
4-b. Show how to present the inventories on the April 30 balance sheet.

Answer 1

	Job 306	Job 307	Job 308	April Total
From March
Direct materials	28000	39000		67000
Direct labor	25000	17000		42000
Applied overhead	12500	8500		21000
Beginning goods in process	65500	64500	0	130000
For April
Direct materials	135000	205000	115000	455000
Direct labor	104000	152000	104000	360000
Applied overhead	52000	76000	52000	180000
Total costs added in April	291000	433000	271000	995000
Total costs (April 30)	356500	497500	271000	1125000
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 costs included in:	Cost of goods sold	Finished goods inventory	Work in process inventory

4-a.
Sales (Job 306)	645000
(-) Cost of goods sold (Job 306)	356500
Gross profit	288500
4-b.
Raw materials inventory on March 31	81000
(+) Raw materials purchases	590000
(-) Raw materials used in April [ 135000 + 205000 + 115000 ]	455000
Raw materials inventory on April 30	216000
Inventories
Raw materials	216000
Work in process	271000
Finished goods	497500
Total inventories	984500