Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4 Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $26,000; factory rent, $31,000; factory utilities, $23,000; and factory equipment depreciation, $54,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $690,000 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		$	26,000			$	40,000
Direct labor			21,000				17,000
Applied overhead			10,500				8,500
Costs during April
Direct materials			137,000				205,000			$	115,000
Direct labor			101,000				153,000				105,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

Required: 1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

	Job 306		Job 307		Job 308		April Total
From March
Direct Materials	$26,000		$40,000				$66,000
Direct Labor	21,000		17,000				38,000
Applied overhead	10,500		8,500				19,000
Beginning goods in process	?		?		?		$0
For April
Direct Materials	137,000		205,000		115,000		457,000
Direct Labor	101,000		153,000		105,000		359,000
Applied overhead	?		?		?		0
Total costs added in April	238,000		358,000		220,000		816,000
Total costs (April 30)							$0
Status on April 30	Finished (sold)		Finished (unsold)		In process
April 30 cost included in:	?		?		?

Problem 15-1A Part 2

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.

No	Transaction	General Journal	Debit	Credit
1	a.	Raw materials inventory
		Accounts payable
2	b.	Work in process inventory
		Raw materials inventory
3	c.	No Transaction Recorded
4	d.	No Transaction Recorded
5	e.	Work in process inventory
		Factory overhead
6	f(1).	Factory overhead
		Raw materials inventory
7	f(2).	Factory overhead
		Cash
8	f(3).	Factory overhead
		Cash
9	f(4).	Factory overhead
		Accumulated depreciation-factory equipment
10	g.	Finished goods inventory
		Work in process inventory
11	h.	Cost of goods sold
		Finished goods inventory
12	i.	No Transaction Recorded
13	j.	Cost of goods sold
		Factory overhead

3. Prepare a schedule of cost of goods manufactured.

MARCELINO COMPANY
Schedule of Cost of Goods Manufactured
For Month Ended April 30
Total manufacturing costs	0
Total cost of work in process	0
Cost of goods manufactured	$0

4.1 Compute gross profit for April.

Gross Profit:

4.2 Show how to present the inventories on the April 30 balance sheet.

Inventories
Raw materials
Work in process
Finished goods
Total inventories