Question

Required information Problem 15-1A Production costs computed and recorded; reports prepared LO P1, P2, P3, P4 (The following information applies to the questions displayed below) Marcelino Co's March 31 inventory of raw materials is $87000. Raw materials purchases in April are $560,000, and factory payroll cost in April is $384.000. Overhead costs incurred in April are Indirect materials, $53,000, indirect labor. $27,000; factory rent. $40,000; factory utilities, $21.000; and factory equipment depreciation, $54,000. 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 Jobs Jobs Job $ 30,000 22,000 11,00 $ 43,000 17.000 8,500 Balances on March 31 Direct saterials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead 138.000 100.000 215,000 153,000 $110.000 100,00 Status on April 30 Finished (sold) Finished (unsold) In process Problem 15-1A Part 1

Answer 1

1
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	30000	43000		73000
Direct Labor	22000	17000		39000
Applied overhead	11000	8500		19500
Beginning goods in process	63000	68500	0	131500
For April
Direct Materials	138000	215000	110000	463000
Direct Labor	104000	153000	100000	357000
Applied overhead	52000	76500	50000	178500
Total costs added in April	294000	444500	260000	998500
Total costs (April 30)	357000	513000	260000	1130000
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 cost included in:	Cost of goods sold	Finished goods inventory	Goods in process inventory
2
		Debit	Credit
1	Raw materials inventory	560000
	Accounts Payable		560000
2	Work in Process inventory	463000
	Raw materials inventory		463000
3	Work in Process inventory	357000
	Cash		357000
4	Factory overhead	27000
	Cash		27000
5	Work in Process inventory	178500
	Factory overhead		178500
6	Factory overhead	53000
	Raw materials inventory		53000
7	Factory overhead	21000
	Cash		21000
8	Factory overhead	54000
	Accumulated depreciation -factory equipment		54000
9	Factory overhead	40000
	Cash		40000
10	Finished goods inventory	870000
	Work in Process inventory		870000
11	Cost of goods sold	357000
	Finished goods inventory		357000
12	Cash	635000
	Sales		635000
13	Cost of goods sold	16500
	Factory overhead		16500
3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	463000
Direct labor used	357000
Factory overhead applied	178500
Total manufacturing costs	998500
Add: Work in Process, March 31	131500
Total cost of work in Process	1130000
Less: Work in Process, April 30	260000
Cost of goods manufactured	870000
4A
Gross Profit	261500
4B
Inventories
Raw materials	131000	=87000+560000-463000-53000
Work in Process	260000
Finished goods	513000
Total inventories	904000
Workings:
Actual factory overhead:
Indirect materials	53000
Indirect labor	27000
Factory rent	40000
Factory utilities	21000
Factory depreciation equipment	54000
Actual factory overhead	195000
Applied overhead	178500
Underapplied overhead	16500
Sales	635000
Less: Cost of goods sold	357000
Less: Underapplied overhead	16500
Gross Profit	261500