Question

Required information [The following information applies to the questions displayed below.] Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $23,000; factory rent, $32,000; factory utilities, $19,000, and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 29,000 20,000 10,000 $ 35,000 18,000 9,000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 135,000 85,000 220,000 150,000 $100,000 105,000 Finished (sold) Finished (unsold) In process a. Materials purchases (on credit). b. Direct materials used in production. c. Direct labor paid and assigned to Work in Process Inventory. d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) g. Transfer of Jobs 306 and 307 to Finished Goods Inventory h. Cost of goods sold for Job 306. i. Revenue from the sale of Job 306. j. 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. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit Raw materials inventory

Answer 1

	Job 306	Job 307	Job 308
Balances on March 31
Direct material	$29,000	$35,000
Direct labor	20,000	18,000
Applied overhead	10,000	9,000
Cost during April
Direct materials	135,000	220,000	100,000
Direct labor	85,000	150,000	105,000
Applied overhead (50% of Direct labor cost)	42,500	75,000	52,500
Total cost	$321,500	$507,000	$257,500
	Finished (sold)	Finished (unsold)	In process

	General Journal	Debit	Credit
a	Raw material inventory	$500,000
	Accounts payable		$500,000
b.	Work in process inventory	$455,000
	Raw material inventory ($135,000+220,000+100,000)		$455,000
c	Work in process inventory	$340,000
	Cash ($85,000+150,000+105,000)		$340,000
d	Factory overhead	$23,000
	Cash		$23,000
e	Work in process inventory ($340,000*50%)	$170,000
	Factory overhead		$170,000
f	Factory overhead	$175,000
	Raw material inventory		$50,000
	Cash (indirect labor)		23,000
	Cash (factory rent and utilities)		51,000
	Accumulated depreciation-Factory equipment		51,000
g	Finished goods inventory (Job 306 & 307)	$828,500
	Work in process inventory		$828,500
h	Cost of goods sold (Job 306)	$321,500
	Finished goods inventory		$321,500
i	Cash	$635,000
	Sales revenue		$635,000
j	Cost of goods sold	$5,000
	Factory overhead		$5,000

Underapplied overhead = Applied overhead - Actual overhead

Underapplied overhead = $170,000 - 175,000 = $5,000