Question

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Problem 2-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4 The following information applies to the questions displayed below Marcelino Co's March 31 inventory of raw materials is $88,000 Raw materials purchases in Aprilare $500,000, and factory payroll cost in April is $387.000. Overhead costs incurred in Aprilare: indirect materials, $59.000 indirect labor, $27.000, factory rent. $36.000 factory utilities. $22.000 and factory equipment depreciation, $60,000. The predetermined overhead rate is 50% of direct labor cost Job 306 is sold for $670.000 cash in April. Costs of the three jobs worked on in April follow Job 306 lob 307 306 308 $ 32,000 23,000 11,500 $ 36,000 18,000 9.000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applled overhead 132,000 104,000 205,000 151,000 $110,000 105,000 Status on April 30 Finished (sold) Finished (unsold) in process

Answer 1

1.

	Job 306	Job 307	Job 308	April Total
From March
Direct materials	32,000	36,000	-	68,000
Direct labor	23,000	18,000	-	41,000
Applied overhead	11,500	9,000	-	20,500
Beginning work in process	66,500	63,000	-	129,500
For April
Direct materials	132,000	205,000	110,000	447,000
Direct labor	104,000	151,000	105,000	360,000
Applied overhead	52,000	75,500	52,500	180,000
Total costs added in April	288,000	431,500	267,500	987,000
Total costs	354,500	494,500	267,500	1,116,500
Status on April 30	Finished ( sold )	Finished (unsold )	In process	(849,000)
April costs included in work in process	0	0	267,500	267,500

2.

Transaction / Event	Account Titles	Debit	Credit
		$	$
a.	Raw materials	500,000
	Accounts Payable		500,000
b.	Work in Process	447,000
	Raw materials		447,000
c.	Work in Process	360,000
	Cash		360,000
d.	Factory Overhead	27,000
	Cash		27,000
e.	Work in Process	180,000
	Factory Overhead		180,000
f. 1.	Factory Overhead	59,000
	Raw Materials		59,000
f. 2	Factory Overhead	22,000
	Cash		22,000
f.3	Factory Overhead	60,000
	Accumulated Depreciation : Equipment		60,000
f.4	Factory Overhead	36,000
	Cash		36,000
g.	Finished Goods Inventory	849,000
	Work in Process Inventory		849,000
h.	Cost of Goods Sold	354,500
	Finished Goods Inventory		354,500
i.	Cash	670,000
	Sales Revenue		670,000
j.	Cost of Goods Sold	24,000
	Factory Overhead		24,000

3.

Marcelino Company Schedule of Cost of Goods Manufactured For the month ended April 30
Direct materials used	$ 447,000
Direct labor	360,000
Applied overhead	180,000
Total manufacturing costs	987,000
Beginning work in process	129,500
Total cost of work in process	1,116,500
Less: Ending work in process	(267,500)
Cost of goods manufactured	$ 849,000

4. 1. Gross profit for April = $ 670,000 - $ ( 354,500 + 24,000) = $ 291,500

4.2.

Raw materials	$ 82,000
Work in Process	267,500
Finished Goods	494,500
Total Inventories	$ 844,000