1 answer

Marcelino Co.'s March 31 inventory of raw materials is $85,000. Raw materials purchases in April are...

Question:

Marcelino Co.'s March 31 inventory of raw materials is $85,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $58,000; indirect labor, $28,000; factory rent, $30,000; factory utilities, $20,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $700,000 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 $ 38,000 Direct labor 25,000 18,000 Applied overhead 12,500 9,000 Costs during April Direct materials 133,000 215,000 $ 105,000 Direct labor 102,000 154,000 101,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process 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. Next Visit question map Question 15 linked to 16 and 17 of 17 Total 15 16 17 of 17 Prev


Answers

Solution 2:

Computation of production cost incurred in april and total cost assigned to each job
Particulars Job 306 Job 307 Job 308 Total
From March:
Direct material $32,000.00 $38,000.00 $0.00 $70,000.00
Direct labor $25,000.00 $18,000.00 $0.00 $43,000.00
Applied overhead (50% of direct labor) $12,500.00 $9,000.00 $0.00 $21,500.00
Beginning Goods in Process $69,500.00 $65,000.00 $0.00 $134,500.00
For April:
Direct material $133,000.00 $215,000.00 $105,000.00 $453,000.00
Direct labor $102,000.00 $154,000.00 $101,000.00 $357,000.00
Applied overhead (50% of direct labor) $51,000.00 $77,000.00 $50,500.00 $178,500.00
Total Cost added in April $286,000.00 $446,000.00 $256,500.00 $988,500.00
Total Costs (April 30) $355,500.00 $511,000.00 $256,500.00 $1,123,000.00
Status on April 30 Finished (Sold) Finished (Unsold) In Process
April 30 cost included in Cost of goods sold Finished goods inventory Work In Process Inventory
Journal Entries - Marcelino Co
Event Particulars Debit Credit
a Raw material inventory Dr $530,000.00
             To Accounts Payable $530,000.00
(To record purchase of raw material)
b Work In Process Dr $453,000.00
             To Raw material inventory $453,000.00
(To record raw material used in production)
c Work In Process Dr $357,000.00
             To Cash $357,000.00
(To record direct labor payment and assigment to production)
d Factory overhead Dr $28,000.00
             To Cash $28,000.00
(To record Indirect labor payment and assigment to factory overhead)
e Work In Process Dr $178,500.00
             To Factory Overhead $178,500.00
(To apply overhead to production)
f1 Factory Overhead Dr $58,000.00
             To Raw material inventory $58,000.00
(To record indirect material used)
f2 Factory Overhead Dr $30,000.00
             To Cash $30,000.00
(To record factory rent)
f3 Factory Overhead Dr $20,000.00
             To Cash $20,000.00
(To record factory utilities)
f4 Factory Overhead Dr $58,000.00
             To Accumulated Depreciation $58,000.00
(To record factory depreciation)
g Finished goods inventory Dr $866,500.00
             To Work In Process $866,500.00
(Being completed jobs transferred to finished goods)
h Cost of goods sold Dr $355,500.00
             To Finished goods inventory $355,500.00
(To record cost of goods sold for Job 306)
i Cash Dr $700,000.00
             To Sales Revenue $700,000.00
(To record sales of Job 306)
j Cost of goods sold Dr $15,500.00
             To Factory Overhead ($194,000 - $178,500) $15,500.00
(To close underapplied overhead to COGS)
.

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