[The following information applies to the questions displayed below.] Marcelino

Question

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. 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.

Problem 19-1A Part 1

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. 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.

Problem 19-1A Part 2

Materials purchases (on credit).

Direct materials used in production.

Direct labor paid and assigned to Work in Process Inventory.

Indirect labor paid and assigned to Factory Overhead.

Overhead costs applied to Work in Process Inventory.

Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)

Transfer of Jobs 306 and 307 to Finished Goods Inventory.

Cost of goods sold for Job 306.

Revenue from the sale of Job 306.

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.

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. 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.

Problem 19-1A Part 3

3. Prepare a schedule of cost of goods manufactured.

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. 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.

Problem 19-1A Part 4

4.1 Compute gross profit for April.

Job 306 Job 307 Job 308 Balances on March 31 Direct materials $ 27,000 $ 45,000 Direct labor 21,000 19,000 Applied overhead 10,500 9,500 Costs during April Direct materials 139,000 215,000 $ 105,000 Direct labor 103,000 152,000 104,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process

Explanation / Answer

Journal Entries:

Gross Profit = Sales - Adjusted Cost of Goods Sold = $ 675,000 - $ 367,500 = $ 307,500.

Job 306 Job 307 Job 308 Total Balances on March 31 $ $ $ $ Direct Materials 27,000 45,000 - Direct Labor 21,000 19,000 - Applied Overhead 10,500 9,500 - Beginning Balance 58,500 73,500 - 132,000 Costs incurred during April Direct Materials 139,000 215,000 105,000 459,000 Direct Labor 103,000 152,000 104,000 359,000 Applied Overhead 51,500 76,000 52,000 179,500 Total Cost incurred during April 293,500 443,000 261,000 997,500 Total Work in Process 352,000 516,500 261,000 1,129,500 Completed and Transferred Out 352,000 516,500 - (868,500) Ending Balance, April 30 - - 261,000 261,000

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