Question

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. 

Answer 1

3
Schedule of cost of goods manufactured
For month ended April 30
Direct materials used	455000
Direct labor used	340000
Factory overhead applied	170000
Total manufacturing costs	965000
Add: Work in Process, March 31	121000
Total cost of work in Process	1086000
Less: Work in Process, April 30	257500
Cost of goods manufactured	828500
4.1
Gross Profit	308500
4.2
Inventories
Raw materials	75000	=80000+500000-455000-50000
Work in Process	257500
Finished goods	507000
Total inventories	839500
Workings:
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	29000	35000		64000
Direct Labor	20000	18000		38000
Applied overhead	10000	9000		19000
Beginning goods in process	59000	62000	0	121000
For April
Direct Materials	135000	220000	100000	455000
Direct Labor	85000	150000	105000	340000
Applied overhead	42500	75000	52500	170000
Total costs added in April	262500	445000	257500	965000
Total costs (April 30)	321500	507000	257500	1086000
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 cost included in:	Cost of goods sold	Finished goods inventory	Goods in process inventory
Actual factory overhead:
Indirect materials	50000
Indirect labor	23000
Factory rent	32000
Factory utilities	19000
Factory depreciation equipment	51000
Actual factory overhead	175000
Less: Applied overhead	170000
Underapplied overhead	5000
Sales	635000
Less: Cost of goods sold	321500
Less: Underapplied overhead	5000
Gross Profit	308500