Question

gross profit

gard UF nyloneStar Login FA COMM TEXTBOOK uz Marcelino Co.'s March 31 Inventory of raw materials is $82,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: Indirect materials, $54,000: Indirect labor, $24,000; factory rent, $39,000; factory utilities, $24,000; and factory equipment depreciation, $53,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $685,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 28,000 23,000 11,500 $ 35,000 15,000 7,500 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 09 136,000 105,000 ? Finished (sold) 215,000 155,000 ? Finished (unsold) $105,000 101,000 ? In process 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 4B Compute gross profit for April Gross profit as < Prev HA 19 of 8 Next >

Answer 1

4-a)
Particulars	Amount (in $ )
Sales	$ 685,000
Less: Cost of goods sold	($ 356,000)
Less: Underapplied overhead	($ 13,500)
Gross Profit	$ 315,500
4-b)
Inventories
Raw materials ( $ 82,000 + $ 570,000 (-) $ 456,000 (-) $ 54,000)	$ 142,000
Work in Process	$ 256,500
Finished goods	$ 447,500
Total inventories	$ 846,000

Answer:
	Job 306	Job 307	Job 308	April Total
From March
Direct Materials	$ 28,000	$ 35,000		$ 63,000
Direct Labor	$ 23,000	$ 15,000		$ 38,000
Applied overhead         ( $ 11,500 / $ 23 ,000 ) = 50%	$ 11,500	$ 7,500		$ 19,000
Beginning goods in process (A)	$ 62,500	$ 57,500	$ 0	$ 120,000
For April
Direct Materials	$ 136,000	$ 215,000	$ 105,000	$ 456,000
Direct Labor	$ 105,000	$ 155,000	$ 101,000	$ 361,000
Applied overhead - 50% of Direct Labor	$ 52,500 ($ 105,000 x 50% )	$ 77,500 ($ 155,000 x 50% )	$ 50,500 ($ 101,000 x 50% )	$ 180,500
Total costs added in April (B)	$ 293,500	$ 447,500	$ 256,500	$ 997,500
Total costs (April 30) (A +B )	$ 356,000	$ 505,000	$ 256,500	$ 1,117,500
Status on April 30	Finished (sold)	Finished (unsold)	Work In process
April 30 cost included in:	Cost of goods sold	Finished goods inventory	Goods in process inventory
Particulars	Amount (in $ )
Indirect materials	$ 54,000
Indirect labor	$ 24,000
Factory rent	$ 39,000
Factory utilities	$ 24,000
Factory depreciation equipment	$ 53,000
Actual Factory overhead	$ 194,000
Particulars	Amount (in $ )
Actual factory overhead	$ 194,000
Less: Applied factory overhead	($ 180,500)
Underapplied overhead	$ 13,500