Marcelino Co.'s March 31 inventory of raw materials is $84,000.
Raw materials purchases in April are $580,000, and factory payroll
cost in April is $379,000. Overhead costs incurred in April are:
indirect materials, $54,000; indirect labor, $25,000; factory rent,
$32,000; factory utilities, $21,000; and factory equipment
depreciation, $52,000. 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 | $ | 32,000 | $ | 37,000 | ||||||||
Direct labor | 24,000 | 15,000 | ||||||||||
Applied overhead | 12,000 | 7,500 | ||||||||||
Costs during April | ||||||||||||
Direct materials | 133,000 | 205,000 | $ | 110,000 | ||||||||
Direct labor | 102,000 | 151,000 | 101,000 | |||||||||
Applied overhead | ? | ? | ? | |||||||||
Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
No | Transaction | General Journal | Debit | Credit |
---|---|---|---|---|
1 | a. | Raw materials inventory | 580,000 | |
Accounts payable | 580,000 | |||
2 | b. | Work in process inventory | 448,000 | |
Raw materials inventory | 448,000 | |||
3 | c. | Factory overhead | 379,000 | |
Cash | 379,000 | |||
4 | d. | Factory overhead | 25,000 | |
Factory overhead | 25,000 | |||
5 | e. | Work in process inventory | 177,000 | |
Factory overhead | 177,000 | |||
6 | f(1). | Factory overhead | 54,000 | |
Raw materials inventory | 54,000 | |||
7 | f(2). | Factory overhead | 32,000 | |
Cash | 32,000 | |||
8 | f(3). | Factory overhead | 21,000 | |
Accumulated depreciation-factory equipment | 21,000 | |||
9 | f(4). | Factory overhead | 52,000 | |
Accumulated depreciation-factory equipment | 52,000 | |||
10 | g. | Finished goods inventory | ||
Work in process inventory | ||||
11 | h. | Cost of goods sold | ||
Finished goods inventory | ||||
12 | i. | Accounts payable | 675,000 | |
Sales | 675,000 | |||
13 | j. | Cost of goods sold | ||
Factory overhead |
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Compute gross profit for April.
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Show how to present the inventories on the April 30 balance sheet.
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Job 306 | Job 307 | Job 308 | |
Direct material | $32,000 | $37,000 | |
Direct labor | 24,000 | 15,000 | |
Applied overhead | 12,000 | 7,500 | |
Total | 68,000 | 59,500 | |
Cost during April | |||
Direct materials | 133,000 | 205,000 | 110,000 |
Direct labor | 102,000 | 151,000 | 101,000 |
Applied overhead@50% | 51,000 | 75,500 | 50,500 |
Total | 354,000 | 491,000 | 261,500 |
Status on April 30 | Finished (sold) | Finished (unsold) | In process |
Indirect materials | $54,000 |
Indirect labor | 25,000 |
Factory rent | 32,000 |
Factory utilities | 21,000 |
Factory equipment depreciation | 52,000 |
Actual overhead | 184,000 |
Applied overhead ($51,000+75,500+50,500) | 177,000 |
Underapplied overhead | $7,000 |
g | Finished goods inventory ($354,000+491,000) | $845,000 | |
Work in process inventory | $845,000 | ||
h | Cost of goods sold | $354,000 | |
Finished goods inventory | $354,000 | ||
j | Cost of goods sold | $7,000 | |
Factory overhead | $7,000 |
MARCELINO COMPANY Schedule of Cost of Goods Manufactured For Month Ended April 30 |
|
Direct material used ($133,000+205,000+110,000) | $448,000 |
Direct labor | 354,000 |
Factory overhead applied | 177,000 |
Total manufacturing cost | 979,000 |
Add: Work in process April 1 (68,000+59,500) | 127,500 |
Less: Work in process April 30 | (261,500) |
Less: Underapplied overhead | (7,000) |
Cost of goods manufactured | $838,000 |
Gross profit = Sales - Adjusted cost of goods sold
Gross profit = $675,000 - 361,000 (354,000+7,000) = $314,000
Inventories | |
Raw materials ($84,000+580,000-448,000) | $216,000 |
Work in process | 261,500 |
Finished goods | 491,000 |
Total inventories | $968,500 |
Marcelino Co.'s March 31 inventory of raw materials is $84,000. Raw materials purchases in April are...
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