Question
Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $380,000.
Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $570,000, and factory payroll cost in April is $380,000. Overhead costs incurred in April are: indirect materials, $54,000; indirect labor, $28,000; factory rent, $31,000; factory utilities, $20,000; and factory equipment depreciation, $55,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $645,000 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 | $ | 32,000 | $ | 37,000 | ||||||||
Direct labor | 24,000 | 15,000 | ||||||||||
Applied overhead | 12,000 | 7,500 | ||||||||||
Costs during April | ||||||||||||
Direct materials | 133,000 | 205,000 | $ | 105,000 | ||||||||
Direct labor | 100,000 | 150,000 | 102,000 | |||||||||
Applied overhead | ? | ? | ? | |||||||||
Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
1. Prepare journal entries for the month of April to record the above transactions.
- 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, including indirect materials. (Factory rent and utilities are paid in cash.)
- Transfer of Jobs 306 and 307 to Finished Goods Inventory.
- Cost of goods sold for Job 306.
- Revenue from the sale of Job 306.
- Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)
2. Prepare a schedule of cost of goods manufactured.
3A. Compute gross profit for April
3B. Show how to present the inventories on the April 30 balance sheet.
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Additional information, Total of Each Production Cost:
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