Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $550,000, and factory payroll cost in April is $378,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $24,000; factory rent, $35,000; factory utilities, $24,000; and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 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 $ 39,000 Direct labor 21,000 16,000 Applied overhead 10,500 8,000 Costs during April Direct materials 140,000 200,000 $ 115,000 Direct labor 100,000 152,000 102,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process rev: 03_15_2018_QC_CS-121813 4.1 Compute gross profit for April. 4.2 Show how to present the inventories on the April 30 balance sheet.

Answer 1

4.1
Sales	675000
Less: Cost of goods sold	360500	=347500+13000
Gross profit	314500
4.2
Inventories
Raw materials	120000	=81000+550000-455000-56000
Goods in process	268000
Finished goods	491000
Total inventories	879000
Workings:
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	26000	39000		65000
Direct Labor	21000	16000		37000
Applied overhead	10500	8000		18500
Beginning goods in process	57500	63000	0	120500
For April
Direct Materials	140000	200000	115000	455000
Direct Labor	100000	152000	102000	354000
Applied overhead	50000	76000	51000	177000
Total costs added in April	290000	428000	268000	986000
Total costs (April 30)	347500	491000	268000	1106500
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
	Actual factory overhead:
	Indirect materials	56000
	Indirect labor	24000
	Factory rent	35000
	Factory utilities	24000
	Factory depreciation equipment	51000
	Actual factory overhead	190000
	Applied overhead	177000
	Underapplied overhead	13000