Question

Required information Problem 15-1A 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 $87,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $28,000; factory rent, $31,000; factory utilities, $24,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $700,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 27,000 23,000 11,500 $ 38,000 18,000 9,000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 132,000 102,000 220,000 154,000 $ 105,000 101,000 Finished (sold) Finished (unsold) In process

Answer 1

First we have to calculate WIP inventory on April 30.

As we can see above only Job 308 is in process. So cost will be assigned follows

WIP = material + labor + (labor*50%)

= $105000 + $101000 + ($101000*50%)

= $256500

Opening WIP will be sum of job 306 and 307

= $27000 + $23000 + $11500 + $38000 + $18000 + $9000

= $126500

Cost of goods manufactured

Particulars	Amount
Direct material used (132000+220000+105000)	$457000
Direct labor ( 102000+154000+101000)	$357000
Applied overhead (50% of labor)	$178500
Total manufacturing cost	$992500
Add - Work in process March 31	$126500
Total
Less - work in process April 30	($256500)
Cost of goods manufactured	$862500

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