Requirea informatiOn Problem 19-1A Production costs computed and recorded; repor

Question

Requirea informatiOn Problem 19-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4 [The following information applies to the questions displayed belowj Marcelino Co.'s March 31 inventory of raw materials is $87,000. Raw materials purchases in April are $580,000, and factory payroll cost in April is $384,000. Overhead costs incurred in April are: indirect materials, $55,000; indirect labor, $29,000; factory rent, $33,000; factory utilities, $23,000; and factory equipment depreciation, $58,000. 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 $ 36,000 13,000 6,500 $ 26,000 Direct materials Direct labor Applied overhead 21,000 10,500 Costs during April Direct materials Direct labor Applied overhead Status on April 30 220,000 $110,000 137,000 104,000 150,000 101,000 Finished (sold) Finished (unsold) In process

Explanation / Answer

Working Note: JOB 306 JOB 307 JOB 308 From March     Direct Material 26000 36000     Direct Labour 21000 13000     Applied Overheads 10500 6500 Beginning Goods in Process 57500 55500 For-April     Direct material 137000 220000 110000     Direct Labour 104000 150000 101000     Applied Overheads 52000 75000 50500      (50% of labour cost) (104000*50%) (150000*50%) (101000*50%) Total Cost added in April 293000 445000 261500 Total Cost(April 30) 350500 500500 261500 Status on April 30 Finished(Sold) Finished(Unsold) Work in Process April 30 Cost included in Cost of Goods Sold Finished Goods Work in Process Req 3: MARCELINO COMPANY SCHEDULE OF COST OF GOODS MANUFACTURED FOR THE MONTH ENDED APRIL 30 Direct Material Used(137,000+220,000+110,000) 467,000 Direct Labour Used(104,000+150,000+101,000) 355,000 Factory Overehad applied(50% of labour 177500 (i.e. 50% of 355,000) Total Manufacturing cost 999,500 Add: Opening Work in process in Mar31 113000 (Balance of Job N. 306 and Job No. 307 on Mar31) (i.e. $ 57,500 and $ 55,500) Total Cost of Work in Process 1112500 Less: Work in Process April 30 261500 (Balance in Job No. 308 )(See note) Cost of goods Manufactured 851000 Req 4.1: Sales revenue from Job No. 306 695,000 Less: Total Cost for Job No. 306 350,500 (See note above) Gross Profit For April 344,500 Req 4.2 Inventories on April 30 Raw material Inventory on April 30: Opening Balance of Raw Material on April 1 87,000 Add: Purchases during the year 580,000 Less: Consumed during the year in Jobs 467,000 Closing Balance of Raw Material on April 30 200,000 INVENTORIES Raw material $200,000 Work In Process(See Note-Job No. 308) $261,500 Finished Goods(See note-Jon No. 307) $500,500 Total Inventories $962,000

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