Question

Required information Problem 02-1A Production costs computed and recorded; reports prepared LO P1, P2, P3, P4 The following information applies to the questions displayed below.) Marcelino Co.'s March 31 inventory of raw materials is $84,000. Raw materials purchases in April are $550,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $57,000 indirect labor. $26.000; factory rent, $32,000; factory utilities, $22.000and factory equipment depreciation, $61,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $690,000 cash in April. Costs of the three jobs worked on in April follow Job 306 Job 307 Job 308 $ 26,000 23,000 11,500 $41,000 16,000 8,000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 134,000 100,000 200,000 152, 000 $115,000 101,000 Finished (sold Finished (unsold In process

Answer 1

		Marcelino Company
Ans 1)		Job 306	Job 307	Job 308	April Total
	Direct Material	$                    26,000.00	$                          41,000.00		$           67,000.00
	Direct Labor	$                    23,000.00	$                          16,000.00		$           39,000.00
	Applied Overhead	$                    11,500.00	$                            8,000.00		$           19,500.00
	Beginning goods in process	$                    60,500.00	$                          65,000.00		$       1,25,500.00
	For April
	Direct Material	$                 1,34,000.00	$                      2,00,000.00	$ 1,15,000.00	$       4,49,000.00
	Direct Labor	$                 1,00,000.00	$                      1,52,000.00	$ 1,01,000.00	$       3,53,000.00
	Applied Overhead(50% of Direct Labor cost)	$                    50,000.00	$                          76,000.00	$     50,500.00	$       1,76,500.00
	Total cost added in April	$                 2,84,000.00	$                      4,28,000.00	$ 2,66,500.00	$       9,78,500.00
	Total cost April 30th	$                 3,44,500.00	$                      4,93,000.00	$ 2,66,500.00	$     11,04,000.00
	April 30th	COGS	Finished goods unsold	WIP Inventory
Ans 2)
	Journal Entries
S.No.	Particular	Debit	Credit
a)	Raw Material Inventory	$                 5,50,000.00
	To Accounts Payable		$                      5,50,000.00
	(Raw material purchased on credit)
b)	Work in process Inventory	$                 4,49,000.00
	To Raw Material Inventory		$                      4,49,000.00
	(Direct Material used in production)
c)	Factory Payroll	$                 3,53,000.00
	To Cash		$                      3,53,000.00
	(Factory payroll paid)
	Work in process Inventory	$                 3,53,000.00
	To Factory Payroll		$                      3,53,000.00
	(Direct Labor paid and assigned to Work in Process)
d)	Factory Overhead	$                    32,000.00
	To Cash		$                          32,000.00
	(Indirect Labor paid and assigned to Factory overhead)
e)	WIP Inventory($100000+$152000+$101000)*50%	$                 1,76,500.00
	To Factory Overhead		$                      1,76,500.00
	(Overhead cost assigned to WIP inventory)
f)	Factory Overhead	$                    57,000.00
	To Raw Material Inventory		$                          57,000.00
	Factory Overhead	$                    26,000.00
	To Factory Payroll		$                          26,000.00
	Factory Overhead	$                    22,000.00
	To Cash		$                          22,000.00
	Factory Overhead	$                    61,000.00
	To Accumulated Depreciation-Factory Equipment		$                          61,000.00
g)	Finished goods Inventory($345000+$491000)	$                 8,37,500.00
	To WIP Inventory		$                      8,37,500.00
h)	Cost of goods sold	$                 3,44,500.00
	To Finished goods inventory		$                      3,44,500.00
i)	Cash	$                 6,90,000.00
	To Sales		$                      6,90,000.00
j	Cost of goods sold	$                    21,500.00
	To Factory Overhead		$                          21,500.00
	Overhead Over applied/ Under applied
	Overhead applied to Jobs		$                      1,76,500.00
	Overhead incurred
	Indirect Material	$                    57,000.00
	Indirect Labor	$                    26,000.00
	Factory Rent	$                    32,000.00
	Factory Utilities	$                    22,000.00
	Factory Equipment-Depreciation	$                    61,000.00	$                      1,98,000.00
	Overhead under applied		$                          21,500.00
	Marcelino Company
Ans 3)	Schedule of cost of goods manufactured
	For month ended April 30th
	Direct Material used	$                 4,49,000.00
	Direct Labor used	$                 3,53,000.00
	Factory overhead applied	$                 1,76,500.00
	Total Manufacturing cost	$                 9,78,500.00
	Add: WIP March 31st	$                 1,25,500.00
	Total cost of WIP	$              11,04,000.00
	Less: WIP April 30th	$                 2,66,500.00
	Cost of goods manufactured	$                 8,37,500.00
Ans 4a)	Gross Profit
	Sales	$                 6,90,000.00
	Less: Cost of goods sold($345000+$3500)	$               -3,66,000.00
	Gross Profit	$                 3,24,000.00
Ans 4b)	Raw Material Inventory
	Beginning Inventory	$                    84,000.00
	Add: Purchases	$                 5,50,000.00
	Direct Material used	$               -4,49,000.00
	Indirect Material used	$                   -57,000.00
	Ending Raw Material Inventory	$                 1,28,000.00
	Raw Material Inventory	$                    84,000.00
	WIP Inventory	$                 2,66,500.00
	Finished Goods Inventory	$                 4,93,000.00