Question

Required information (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 $382,000. Overhead costs incurred in April are: indirect materials, $58,000; indirect labor, $27,000; factory rent, $39,000; factory utilities, $24,000; 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 Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead $ 31,000 22,000 11,000 $ 40,000 19,000 9,500 135,000 101,000 220,000 152,000 $110,000 102,000 ? In process Status on April 30 Finished (sold) Finished (unsold)

Answer 1

Answer:

	A	B	C	D	E
1		Job 306	Job 307	Job 308	April Total
2	From March
3	Direct Materials	31,000	40,000		71,000
4	Direct Labor	22,000	19,000		41,000
5	Applied Overhead	11,000	9,500		20,500
6	Beginning goods in process	64,000	68,500	-	132,500
7	For April
8	Direct Materials	135,000	220,000	110,000	465,000
9	Direct Labor	101,000	152,000	102,000	355,000
10	Applied Overhead	50,500	76,000	51,000	177,500
11	Total Costs Added in April	286,500	448,000	263,000	997,500
12	Total Costs (April 30)	350,500	516,500	263,000	1,130,000
13	Status on April 30	Finished (sold)	Finished (Unsold)	In process
14	April 30 Cost included in:	Cost of Goods Sold	Finished Good Inventory	Work in Process Inventory

Actual Overhead = 58,000 + 27,000 + 39,000 + 24,000 + 52,000

= 200,000

Overhead Applied = 355,000 * 50% = 177,500

Actual Overhead > Overhead Applied , So overhead is Under Applied.

Underapplied Overhead = 200,000 - 177,500

= 22,500

Underapplied Overhead is Adjusted to Cost of Goods Sold.

	A	B
16	4a)
17	Sale of Job 306	675,000
18	Less : Cost of Goods Sold (350,500 + 22,500 )	373,000
19	Gross Profit (=B17+B18)	302,000
20	4b)
21
22	Inventories	Amount ($)
23	Raw Materials (84,000 + 550,000 - 58,000 - 465,000 )	111,000
24	Work in Process	263,000
25	Finished Goods	516,500
26	Total Inventories (=B23+B24+B25)	890,500

	A	B	C	D	E
1		Job 306	Job 307	Job 308	April Total
2	From March
3	Direct Materials	31,000	40,000		= B3+C3
4	Direct Labor	22,000	19,000		= B3+C3
5	Applied Overhead	11,000	9,500		= B3+C3
6	Beginning goods in process	64,000	68,500	-	= B3+C3
7	For April
8	Direct Materials	135,000	220,000	110,000	=B8+C8+D8
9	Direct Labor	101,000	152,000	102,000	=B9+C9+D9
10	Applied Overhead	=B9 * 50%	=C9 * 50%	=D9 * 50%	=B10+C10+D10
11	Total Costs Added in April	=B8+B9+B10	=C8+C9+C10	=D8+D9+D10	=B11+C11+D11
12	Total Costs (April 30)	=B6+B11	=C6+C11	=D6+D11	=E6+E11
13	Status on April 30	Finished (sold)	Finished (Unsold)	In process
14	April 30 Cost included in:	Cost of Goods Sold	Finished Good Inventory	Work in Process Inventory