Question

Chap 15 Homework Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $580,000, and factory payroll cost in April is $384,000. Overhead costs incurred in Aprilare: indirect materials, $53,000; indirect labor, $28,000; factory rent, $37.000; factory utilities, $21,000; and factory equipment depreciation, $53,000. The predetermined overhead rate is 50% of direct labor cost Job 306 is sold for $655,000 cash in April. Costs of the three jobs worked on in April follow Job 306 Job 307 Job 308 Part 4 of 4 $ 25,000 24,000 12,000 $39.000 17.000 8.500 125 points Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 134,000 102,000 220,000 152,000 $105,000 122.000 Spoed Finished (sold) Finished (unsold) In process References 4-a. Compute gross profit for April 4-b. Show how to present the inventories on the April 30 balance sheet. Complete this question by entering your answers in the tabs below. Required 4A Required 48 Compute gross profit for April Gross profit

Answer 1

Solution 4a:

Computation of production cost incurred in april and total cost assigned to each job
Particulars	Job 306	Job 307	Job 308	Total
From March:
Direct material	$25,000.00	$39,000.00	$0.00	$64,000.00
Direct labor	$24,000.00	$17,000.00	$0.00	$41,000.00
Applied overhead (50% of direct labor)	$12,000.00	$8,500.00	$0.00	$20,500.00
Beginning Goods in Process	$61,000.00	$64,500.00	$0.00	$125,500.00
For April:
Direct material	$134,000.00	$220,000.00	$105,000.00	$459,000.00
Direct labor	$102,000.00	$152,000.00	$102,000.00	$356,000.00
Applied overhead (50% of direct labor)	$51,000.00	$76,000.00	$51,000.00	$178,000.00
Total Cost added in April	$287,000.00	$448,000.00	$258,000.00	$993,000.00
Total Costs (April 30)	$348,000.00	$512,500.00	$258,000.00	$1,118,500.00
Status on April 30	Finished (Sold)	Finished (Unsold)	In Process
April 30 cost included in	Cost of goods sold	Finished goods inventory	Work In Process Inventory

Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied overhead
= $348,000 + $14,000 = $362,000
Gross profit = Sales Revenue - Cost of goods sold
=$655,000 - $362,000 = $293,000

Solution 4b:

Inventories - April 30
Particulars	Amount
Raw material inventory ($88,000 + $580,000 - $459,000 - $53,000)	$156,000.00
Work In Process Inventory	$258,000.00
Finished goods inventory	$512,500.00
Total	$926,500.00