Required information Problem 2-1A 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 $88,000. Raw materials purchases in April are $600,000, and factory payroll cost in April is $380,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor $22,000; factory rent, $32,000; 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 $685,000 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 40,000 27,000 24,000 12,000 Direct labor 13,000 Applied overhead Costs during April Direct materials 6,500 137,000 103,000 215,000 151,000 $100,000 Direct labor 104,000 Applied overhead Finished Finished Status on April 30 In process (sold) (unsold) Problem 2-1A 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). April Total Job 306 Job 307 Job 308 From March Direct Materials 27,000 40,000 67,000 24,000 13,000 Direct Labor 37,000 Applied overhead 12,000 6,500 18,500 Beginning goods in process For April Direct Materials 137,000 215,000 100,000 452,000 103,000 151,000 104,000 358,000 Direct Labor Applied overhead April costs Total costs (April 30) Status on April 30 April 30 cost included in: Finished (sold) Finished (unsold) In process Problem 2-1A 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. View transaction list Journal entry worksheet 7 1 2 3 5 6 8 13 Record the entry for Materials purchases (on credit) Note: Enter debits before credits Transaction General Journal Debit Credit a. Record entry Clear entry View general journal Problem 2-1A 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 Total cost of work in process Cost of goods manufactured Problem 2-1A 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 process Finished goods Total inventories
