Question

Marcelino Co.'s March 31 inventory of raw materials is $86,000. Raw materials purchases in April are $560,000, and factory payroll cost in April is $378,000. Overhead costs incurred in April are: indirect materials, $51,000; indirect labor, $23,000; factory rent, $33,000; factory utilities, $24,000; and factory equipment depreciation, $53,00o. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $630,000 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 $27,000 22,000 11,000 $36,000 Direct labor 17,000 Applied overhead Costs during April 8,500 Direct materials 215,000 $110,000 104,000 132,000 101,000 Direct labor 150,000 Applied overhead Finished Finished In April 30 Status on sold) (unsold) process Materials purchases (on credit) Direct materials used in production. Direct labor paid and assigned to Work in Process Inventory. Indirect labor paid and assigned to Factory Overhead. Overhead costs applied to Work in Process Inventory. Actual overhead costs incurred. includina indirect materials. (Factorv rent and utilities are paid in cash.)

Answer 1

Solution:

2.) Journal entries

Transaction	General journal	Debit ($)	Credit($)
a.)	Raw materials inventory	560,000
	Accounts payable		560,000
b.)	Work in process inventory (132,000+215,000+110,000)	457,000
	Raw material inventory		457,000
c.)	Work in process inventory (101,000 + 150,000 + 104,000)	355,000
	Cash		355,000
d.)	Factory overhead	23,000
	Cash		23,000
e.)	Work in process inventory (355000 of 50%)	177,500
	Factory overhead		177,500
f(1)	Factory overhead	51,000
	Raw materials inventory		51,000
f(2)	Factory overhead	24,000
	Cash		24,000
f(3)	Factory overhead	53,000
	Accumulated depreciation -factory equipment		53,000
f(4)	Factory overhead	33,000
	Cash		33,000
g.)	Finished good inventory	845,000
	Work in process inventory		845,000
h.)	Cost of goods sold	343,500
	Finished goods inventory		343,500
I)	Cash	630,000
	Sales		630,000
j)	Cost of goods sold	6,500
	Factory overhead		6,500

g.) beginning work in process +Direct material + direct labor +Applied overhead)

For job 306 =(27,000 +22,000+11,000 +132,000+101,000+ 50,500) =343,500 (goods sold)

For job 307 =(36,000+17,000 +8,500 +215,000 +150,000 +75,000) =501,500

Finished goods inventory =343,500+501,500 =845,000

j. Factory overhead

Overhead applied to jobs		$177,500
Overhead incurred:
Indirect material	$51,000
Indirect labor	$23,000
Factory rent	$33,000
Factory utilities	$24,000

Factory depreciation on equipment =53,000

51,000,+23,000+33,000+24,000+53,000 =$184,000

Under applied overhead =184,000-177,500 =6,500

3.) Marcelino company: Schedule of cost of goods manufactured

For month ended April

Direct material used	$457,000
Direct labor used	$355,000
Factory overhead applied	$177,500
Total manufacturing cost	$989,500
Add: work in process March 31	$121,500
Total cost of work in process	$1,111,000
Less:work in process April 30(110,000+104,000+52,000) 104000 of 50%=52,000	$266,000
Cost of goods manufactured	$845,000

4.) Gross profit =$280,000

Sales	$630,000
Less: cost of goods sold (343500+6500)	$350,000
Gross profit	$280,000

*sorry for inconvenience of( j.)