Problem 19-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

[The following information applies to the questions displayed below.] Marcelino Co.'s March 31 inventory of raw materials is $90,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $381,000. Overhead costs incurred in April are: indirect materials, $55,000; indirect labor, $29,000; factory rent, $33,000; factory utilities, $20,000; and factory equipment depreciation, $61,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $680,000 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			$	44,000
Direct labor			20,000				18,000
Applied overhead			10,000				9,000
Costs during April
Direct materials			138,000				210,000			$	110,000
Direct labor			102,000				150,000				100,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

Problem 19-1A 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).

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

Adjust Underapplied or Overapplied Overhead opens in a new window

Job Cost Sheet opens in a new window

Labor Cost Flows and Documents opens in a new window

Materials Cost Flows and Documents opens in a new window

Overhead Cost Flows opens in a new window

-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.

Problem 19-1A Part 3

3. Prepare a schedule of cost of goods manufactured

Problem 19-1A Part 4

4.1 Compute gross profit for April.

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