Question

Marcelino Co.'s March 31 inventory of raw materials is $90,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $381,000. Overhead costs incurred in April are: indirect materials, $53,000; indirect labor, $25,000; factory rent, $36,000; factory utilities, $24,000, and factory equipment depreciation, $55,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 28,000 24,000 12,000 $ 37,000 15,000 7,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 133,000 100,000 215,000 152,000 $110,000 104,000 Finished (sold) Finished (unsold) In process

Answer 1

4.1) Actual overhead = 53000+25000+36000+24000+55000 = 193000

Applied overhead = 356000*50% = 178000

Under applied overhead = 193000-178000 = 15000

Adjusted cost of goods sold = 347000+15000 = 362000

Gross profit = Sales-Cost of goods sold = 655000-362000 = 293000