Question

Marcelino Co.'s March 31 inventory of raw materials is $85,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $386,000. Overhead costs incurred in April are: indirect materials, $52,000; indirect labor, $25,000; factory rent, $36,000; factory utilities, $19,000; and factory equipment depreciation, $52,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $640,000 cash in April. Costs of the three jobs worked on in April follow.

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	31,000			$	36,000
Direct labor			24,000				13,000
Applied overhead			12,000				6,500
Costs during April
Direct materials			139,000				215,000			$	115,000
Direct labor			103,000				155,000				103,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

Problem 15-1A Part 2

1. Materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid and assigned to Work in Process Inventory.
4. Indirect labor paid and assigned to Factory Overhead.
5. Overhead costs applied to Work in Process Inventory.
6. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
8. Cost of goods sold for Job 306.
9. Revenue from the sale of Job 306.
10. 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.

Answer 1

	Job 306	Job 307	Job 308	Total
Balances on March 31
Direct materials	$31000	$36,000		$67,000
Direct labor	$24,000	$13,000		$37,000
Applied overhead	$12,000	$6,500		$18,500
Beginning goods in process	$67000	$55,500	$0.00	$122,500
Costs during April
Direct materials	$139,000	$215,000	$115,000	$469,000
Direct labor	$103,000	$155,000	$103,000	$361,000
Applied overhead	$51,500	$77,500	$51,500	$180,500
Total Cost added in april	$293,500	$4,47,500	$2,69,500	$10,10,500
Total costs (April 30)	$3,60,500	$5,03,000	$269500	$11,33,000
Status on April 30	Finished (sold)	Finished (unsold)	In process

Accounts and Titles	Debit	Credit
a)	Raw Material Inventory	$510,000
	Accounts Payable		$510,000
b)	Work in process inventory	$469,000
	Raw Material Inventory		$469,000
c)	Work in process inventory	$361,000
	Cash		$361,000
d)	Factory Overhead	$25,000
	Cash		$25,000
e)	Work in process inventory	$180,500
	Factory Overhead		$180,500
f) 1	Factory Overhead	$52,000
	Raw Material Inventory		$52,000
f ) 2	Factory Overhead	$19,000
	Cash		$19,000
f) 3	Factory Overhead	$52000
	Accumulated Depreciation--Factory Equipment		$52,000
f) 4	Factory Overhead	$36,000
	Cash		$36,000
g)	Finished Goods Inventory	$863,500
	Work in process inventory		$863,500
h)	Cost of Good sold	$360,500
	Finished Goods Inventory		$3,60,500
i)	Cash	$640,000
	Sales		$640,000