Question

Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $26,000; factory rent, $33,000; factory utilities, $19,000; and factory equipment depreciation, $57,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 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		$	25,000			$	40,000
Direct labor			21,000				14,000
Applied overhead			10,500				7,000
Costs during April
Direct materials			135,000				210,000			$	105,000
Direct labor			100,000				155,000				104,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

Job 306 Job 307 Job 308 April Total From March Direct Materials $25,000 $40,000 $65,000 Direct Labor 21,000 14,000 35,000 Applied overhead 10,500 7,000 17,500 Beginning goods in process For April Direct Materials 135,000 210,000 105,000 450,000 Direct Labor 100,000 155,000 104,000 359,000 Applied overhead Total costs added in April Total costs (April 30) Status on April 30 Finished (sold) Finished (unsold) In process April 30 cost included in:

Answer 1

Job 306 Job 307 Job 308 April Total from March Direct materials $25,000 $40,000 $65,000 Direct labor $21,000 $14,000 $35,000 Applied overhead $10,500 $7,000 $17, soo beginning goods-in- $56,500 $61,000 $0 $ 17,00 Process for April Direct Materials $135000 $210,000 $105,000 $450,000 Direct labor $100,000 $155,000 $104,000 $359,000 Applied overhead $50,000 $77,500 $52,000 $ 179,500 Total costs added in April $285,000 $442,500 $261,000 $988,500 Total costs (Aprid 30) $341,500 $503,500 $261,000 $1,106,000 finished finished Status on April 30 (sold) (unsold) In process April 30 cost Cost of finished work in included in goods sold process goods inventory Inventory Calculation: Beginning goods in process = (Direct materials & Direct Labor & Applied overhead) for Job 306: Beginning goods in process = ($25,000 & & 21,000+ $10.500 - $56,500

Applied overhead & 50% of direct labor cost Job 3o6: Applied overhead & 50% * $100,000 - $50,000 Job 307: Applied overhead & 50% * $155,000 & $77,500 Job 308 : Applied overhead = 50% * $ 104,000 = $52,000 April Total: Applied overhead = 50% & $359,000 = $179,500 Total costs added in April = Direct Materials & Direct Labor & Applied overhead for Job 3obi Total costs added in April = $135,000 + $100,000+ $50,000 = $285,000 goods, Total coste (April 30) =/ Beginning in process & Total costs added in April) for Job 306? Total costs = $56,500 & $285,000 - $341,500