Question

Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $23,000; factory rent, $32,000; factory utilities, $19,000; and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 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		$	29,000			$	35,000
Direct labor			20,000				18,000
Applied overhead			10,000				9,000
Costs during April
Direct materials			135,000				220,000			$	100,000
Direct labor			85,000				150,000				105,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

1. Materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid and assigned to Work in Process Inventory.
4. Indirect labor paid and assigned to Factory Overhead.
5. Overhead costs applied to Work in Process Inventory.
6. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
8. Cost of goods sold for Job 306.
9. Revenue from the sale of Job 306.
10. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2. Prepare journal entries for the month of April to record the above transactions.

Answer 1

			Job 306	Job 307	Job 308	April
1)						total
From March
Direct materials			29,000	35,000	0	64,000
Direct labor			20,000	18,000	0	38,000
applied overhead			10,000	9,000	0	19,000
Beginning goods in process			59,000	62,000	0	121,000
For April
Direct materials			135,000	220,000	100,000	455,000
Direct labor			85,000	150,000	105,000	340,000
applied overhead			42500	75000	52500	170,000
Total costs added in April			262,500	445,000	257,500	965,000
total costs (April 30)			321,500	507,000	257,500	1,086,000
Satus on april 30			fin(sold)	fin(unsold)	in process
April costs included in :			COGS	finished	WIP
				goods
				inventory
2)	TR	General journal				Debit	Credit
	a.	Raw materials inventory				500,000
		Accounts payable					500,000
	b.	Work in process inventory				455,000
		Raw materials inventory					455,000
	c.	Work in process inventory				340,000
		Cash					340,000
	d.	Factory overhead				23,000
		cash					23,000
	e.	Factory overhead				170,000
		work in process inventory					170,000
	f.	Factory overhead				152,000
		Raw materials inventory					50,000
		Cash					51,000
		Accumulated Depreciation					51,000
	g.	finished goods inventory				828,500
		Work in process inventory					828,500
	h.	Cost of goods sold				321,500
		finished goods inventory					321,500
	i.	Cash				635,000
		sales					635,000
	j.	cost of goods sold				5,000
		Factory overhead					5,000