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Required information Problem 2-2A (Algo) Computing and recording job costs; preparing schedule of cost of goods manufactured LO P1, P2, P3, P4 (The following information applies to the questions displayed below.) Marco Company shows the following costs for three jobs worked on in April. Job 306 Job 307 Job 308 $ 30,000 25,000 12,500 $ 43,000 16,000 8,000 Balances on March 31 Direct materials used (in March) Direct labor used (in March) Overhead applied (March) Costs during April Direct materials used Direct labor used Overhead applied Status on April 30 140,000 101,000 205,000 154,000 $ 110,000 100,000 ? Finished (sold) Finished (unsold) In process Additional Information a. Raw Materials Inventory has a March 31 balance of $90,000. b. materials purchases in April are $580,000, and total factory payroll cost in April 5,000. c. Actual overhead costs incurred in April are indirect materials, $56,000; indirect labor, $30,000; factory rent, $39,000; factory utilities, $23,000; and factory equipment depreciation, $62,000. d. Predetermined overhead rate is 50% of direct labor cost. e. Job 306 is sold for $685,000 cash in April. Problem 2-2A (Algo) Part 2 2. Determine the total cost assigned to each job as of April 30 (including the balances from March 31). Job 306 Job 307 Job 308 April Total March Direct materials $ 30,000 Direct labor 43,000 16,000 8,000 67,000 25,000 12,500 67,500 Overhead applied Work in process, beginning $ 0 $ 134,500 April Direct materials 205,000 110,000 140,000 101,000 455,000 355,000 Direct labor 154,000 100,000 0 Overhead applied Costs added in April 241,000 359,000 210,000 810,000 Total costs $ 0 Status on April 30 Finished (sold) In process Finished (unsold) Finished goods inventory April 30 cost included in: Cost of goods sold Work in process inventory a. Materials purchases (on credit). b. Direct materials used. c. Direct labor used (and paid in cash) and assigned to Work in Process Inventory. d. Indirect materials used and assigned to Factory Overhead. e. Indirect labor used (and paid in cash) and assigned to Factory Overhead. f. Overhead costs applied to Work in Process Inventory. g. Actual other overhead costs incurred (Factory rent and utilities are paid in cash.) h. Transfer of Jobs 306 and 307 to Finished Goods Inventory. i. Cost of goods sold for Job 306. j. Revenue from the sale of Job 306 received in cash. k. Close underapplied or overapplied overhead to the Cost of Goods Sold account. 3. Prepare journal entries for the month of April to record the above transactions. 4. Prepare a schedule of cost of goods manufactured for the month end April 30. MARCO COMPANY Schedule of Cost of Goods Manufactured For Month Ended April 30 Total manufacturing costs Total cost of work in process Cost of goods manufactured Problem 2-2A (Algo) Part 5 5-a. Compute gross profit for April. 5-b. Show how the three inventory accounts are reported on the April 30 balance sheet
