In: Accounting
Required information
Problem 2-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4
[The following information applies to the questions
displayed below.]
Marcelino Co.'s March 31 inventory of raw materials is $84,000. Raw
materials purchases in April are $540,000, and factory payroll cost
in April is $364,000. Overhead costs incurred in April are:
indirect materials, $59,000; indirect labor, $26,000; factory rent,
$38,000; factory utilities, $19,000; and factory equipment
depreciation, $58,000. 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 | $ | 30,000 | $ | 36,000 | ||||||||
Direct labor | 25,000 | 14,000 | ||||||||||
Applied overhead | 12,500 | 7,000 | ||||||||||
Costs during April | ||||||||||||
Direct materials | 133,000 | 210,000 | $ | 100,000 | ||||||||
Direct labor | 105,000 | 150,000 | 101,000 | |||||||||
Applied overhead | ? | ? | ? | |||||||||
Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
Problem 2-1A Part 2
a-Materials purchases (on credit).
b-Direct materials used in production.
c-Direct labor paid and assigned to Work in Process Inventory.
d-Indirect labor paid and assigned to Factory Overhead.
e-Overhead costs applied to Work in Process Inventory.
f-Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
g-Transfer of Jobs 306 and 307 to Finished Goods Inventory.
h-Cost of goods sold for Job 306.
i-Revenue from the sale of Job 306.
j-Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)
Problem 2-1A Part 2 :
Date | Accounts Titles | Debit $ | Credit $ |
a | Material | 540000 | |
AP | 540000 | ||
(materials purchases on account) | |||
b | WIP Inventory | 443000 | |
Material | 443000 | ||
(being Direct material used in production) | |||
c | Payroll expenses | 356000 | |
Cash | 356000 | ||
(being direct labor paid) | |||
c | WIP Inventory | 356000 | |
Payroll expenses | 356000 | ||
(being direct labor assigned to WIP) | |||
d | Payroll expenses | 26000 | |
Cash | 26000 | ||
d | Manufacturing Overhead | 26000 | |
Payroll expenses | 26000 | ||
e | WIP Inventory | 178000 | |
Manufacturing Overhead | 178000 | ||
(50% of DLC) | |||
f | Factory rent | 38000 | |
Factory utilities | 19000 | ||
Indirect material | 59000 | ||
Factory Depreciaton | 58000 | ||
Material | 59000 | ||
Depreciaton equipment | 58000 | ||
Cash | 57000 | ||
(being actual overhead costs incurred ) | |||
g | Finished Goods Inventory | 850000 | |
WIP inventory | 850000 | ||
(Job 306 = 358000 & Job 307 = 492000) | |||
h | Cost of Goods sold | 358000 | |
Finished Goods Inventory | 358000 | ||
i | AR | 670000 | |
Sales revenue | 670000 | ||
j | Cost of Goods sold | 22000 | |
Manufacturing Overhead | 22000 | ||
(Actual 200000 - Applied 178000 - Under-applied ) |