Question

Marcelino Co.'s March 31 inventory of raw materials is $89,000. Raw materials purchases in April are $560,000, and factory payroll cost in April is $382,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $29,000; factory rent, $38.000; factory utilities, $23,000; and factory equipment depreciation, $52,000. 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 $ $ 28,000 22,000 11,000 44,000 13,000 6,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 133,000 100,000 215,000 150,000 $ 115,000 103,000 Finished (sold) Finished (unsold) process 4.1 Compute gross profit for April. Gross Profit

Answer 1

Answer:

A.
Sl. No.	Description	Job 306	Job 307	Job 308	Total
1	Balances on March 31
2	Direct Materials	$28,000	$44,000		$72,000
3	Direct Labor	$22,000	$13,000		$35,000
4	Applied Overhead	$11,000	$6,500		$17,500
5	Beginning goods in process (2 to 4)	$61,000	$63,500	$0	$1,24,500
6	Cost during April
7	Direct Materials	$1,33,000	$2,15,000	$1,15,000	$4,63,000
8	Direct Labor	$1,00,000	$1,50,000	$1,03,000	$3,53,000
9	Applied Overhead (50% of 8)	$50,000	$75,000	$51,500	$1,76,500
10	Total Cost during April (11 to 13)	$2,83,000	$4,40,000	$2,69,500	$9,92,500
11	Total Cost April 30 (5+10)	$3,44,000	$5,03,500	$2,69,500	$11,17,000
12	Status on April 30	Finished (sold)	Finished (unsold)	In process
B.
Sl. No.	Overhead Cost incurred in April	$
1	Indirect Materials	$56,000
2	Indirect Labor	$29,000
3	Factory Rent	$38,000
4	Factory Utilities	$23,000
5	Factory Equipment Depreciation	$52,000
6	Total	$1,98,000
C.
Sl. No.	Calculation of overhead Cost not applied	$
1	Overhead Cost incurred in April (B.6)	$1,98,000
2	Total Applied Overhead Cost during April (A.9)	$1,76,500
3	Overhead Cost not applied (1-2)	$21,500
D.	Computation of Gross profit for April
Sl. No.	Description	$
1	Job 306 is sold for cash in April	$6,95,000
2	Less:Total Cost April 30 (A.11)	$3,44,000
3	Less:Overhead Cost not applied (C.3)	$21,500
4	Gross profit for April (1-2-3)	$3,29,500
Hence, gross profit for April is $329,500