Question

Marcelino Co.'s March 31 inventory of raw materials is $84,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $384,000. Overhead costs incurred in April are: indirect materials, $58,000; indirect labor, $29,000; factory rent, $40,000; factory utilities, $21,000; and factory equipment depreciation, $60,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $695,000 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			$	37,000
Direct labor			22,000				16,000
Applied overhead			11,000				8,000
Costs during April
Direct materials			130,000				215,000			$	105,000
Direct labor			104,000				151,000				100,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

rev: 03_14_2018_QC_CS-121813

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.)

2. Prepare journal entries for the month of April to record the above transactions.

Note: Please solve the problem completely

Answer 1

a	Raw materials inventory	570000
	Accounts payable		570000
b	Work in Process inventory	450000
	Raw materials inventory		450000
c	Work in Process inventory	355000
	Cash		355000
d	Factory Overhead	29000
	Cash		29000
e	Work in Process inventory	177500		=355000*50%
	Factory Overhead		177500
f	Factory Overhead	58000
	Raw materials inventory		58000
	Factory Overhead	40000
	Cash		40000
	Factory Overhead	60000
	Accumulated depreciation-factory equipment		60000
	Factory Overhead	21000
	Cash		21000
g	Finished goods inventory	847500
	Work in Process inventory		847500
h	Cost of goods sold	345000
	Finished goods inventory		345000
i	Cash	695000
	Sales		695000
j	Cost of goods sold	30500		=208000-177500
	Factory Overhead		30500
	Actual overhead = 58000+29000+40000+21000+60000 = $208000