Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

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Marcelino Co.'s March 31 inventory of raw materials is $83,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $55,000; indirect labor, $27,000; factory rent, $39,000; factory utilities, $20,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $640,000 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		$	30,000			$	38,000
Direct labor			21,000				18,000
Applied overhead			10,500				9,000
Costs during April
Direct materials			136,000				210,000			$	100,000
Direct labor			102,000				154,000				102,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

rev: 02_06_2017_QC_CS-77766

References

Section BreakProblem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

1.

Problem 15-1A Part 1

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	$30,000	$38,000		$68,000
Direct Labor	21,000	18,000		39,000
Applied overhead	10,500	9,000		19,500
Beginning goods in process				$0
For April
Direct Materials	136,000	210,000	100,000	446,000
Direct Labor	102,000	154,000	102,000	358,000
Applied overhead				0
Total costs added in April	238,000	364,000	202,000	804,000
Total costs (April 30)				$0
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 cost included in:

2.

Problem 15-1A Part 2

a.	Materials purchases (on credit).
b.	Direct materials used in production.
c.	Direct labor paid and assigned to Work in Process Inventory.
d.	Indirect labor paid and assigned to Factory Overhead.
e.	Overhead costs applied to Work in Process Inventory.
f.	Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
g.	Transfer of Jobs 306 and 307 to Finished Goods Inventory.
h.	Cost of goods sold for Job 306.
i.	Revenue from the sale of Job 306.
j.	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.

Transaction Index :

.....

A. Record the entry for Materials purchases (on credit).

Record the direct materials used in production.

Record the Direct labor paid and assigned to Work in Process Inventory.

Record the indirect labor paid and assigned to Factory Overhead.

Record the entry for Overhead costs applied to Work in Process Inventory.

Record the cost of indirect materials used.

Record the cost of factory utilities, paid in cash.

Record depreciation on factory equipment.

Record the cost of factory rent, paid in cash.

Record the entry for transfer of Jobs 306 and 307 to Finished Goods Inventory.

Record the Cost of goods sold for Job 306.

Record the revenue from the sale of Job 306.

Record the entry for assignment of any underapplied or overapplied overhead to the Cost of Goods Sold.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a.

+

Problem 15-1A Part 3

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

Problem 15-1A Part 4

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 Progress= Finished Goods= Total Inventories= $