Question

Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

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Marcelino Co.'s March 31 inventory of raw materials is $86,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $378,000. Overhead costs incurred in April are: indirect materials, $53,000; indirect labor, $23,000; factory rent, $37,000; factory utilities, $21,000; and factory equipment depreciation, $56,000. 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		$	27,000			$	41,000
Direct labor			22,000				15,000
Applied overhead			11,000				7,500
Costs during April
Direct materials			133,000				210,000			$	115,000
Direct labor			103,000				151,000				101,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

rev: 03_15_2018_QC_CS-121813

Problem 15-1A Part 2

1. Materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid and assigned to Work in Process Inventory.
4. Indirect labor paid and assigned to Factory Overhead.
5. Overhead costs applied to Work in Process Inventory.
6. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
8. Cost of goods sold for Job 306.
9. Revenue from the sale of Job 306.
10. 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.

Answer 1

			Job 306	Job 307	Job 308	April
1)						total
From March
Direct materials			27,000	41,000	0	68,000
Direct labor			22,000	15,000	0	37,000
applied overhead			11,000	7,500	0	18,500
Beginning goods in process			60,000	63,500	0	123,500
For April
Direct materials			133,000	210,000	115,000	458,000
Direct labor			103,000	151,000	101,000	355,000
applied overhead			51500	75500	50500	177,500
Total costs added in April			287,500	436,500	266,500	990,500
total costs (April 30)			347,500	500,000	266,500	1,114,000
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				590,000
		Accounts payable					590,000
	b.	Work in process inventory				458,000
		Raw materials inventory					458,000
	c.	Work in process inventory				355,000
		Cash					355,000
	d.	Factory overhead				23,000
		cash					23,000
	e.	Factory overhead				177,500
		work in process inventory					177,500
	f.	Factory overhead				167,000
		Raw materials inventory					53,000
		Cash					58,000
		Accumulated Depreciation					56,000
	g.	finished goods inventory				847,500
		Work in process inventory					847,500
	h.	Cost of goods sold				347,500
		finished goods inventory					347,500
	i.	Cash				635,000
		sales					635,000
	j.	cost of goods sold				12,500
		Factory overhead					12,500