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 $80,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $365,000. Overhead costs incurred in April are: indirect materials, $53,000; indirect labor, $27,000; factory rent, $32,000; factory utilities, $20,000; and factory equipment depreciation, $53,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 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 $ 25,000 $40,000
Direct labor 25,000 18,000
Applied overhead 12,500 9,000
Costs during April
Direct materials 131,000 205,000 $ 105,000
Direct labor 105,000 152,000 101,000
Applied overhead ? ? ?
Status on April 30
Finished (sold) Finished (unsold)
In process
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 $25,000 $40,000 $65,000
Direct Labor 25,000 18,000 43,000
Applied overhead 12,500 9,000 21,500
Beginning goods in process $0
For April
Direct Materials 131,000 205,000 105,000 441,000
Direct Labor 105,000 152,000 101,000 358,000
Applied overhead 0
Total costs added in April 236,000 357,000 206,000 799,000
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
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.
1 Record the entry for Materials purchases (on credit).
2 Record the direct materials used in production.
3 Record the Direct labor paid and assigned to Work in Process Inventory.
4 Record the indirect labor paid and assigned to Factory Overhead.
5 Record the entry for Overhead costs applied to Work in Process Inventory.
6 Record the cost of indirect materials used.
7 Record the cost of factory utilities, paid in cash.
8 Record depreciation on factory equipment.
9 Record the cost of factory rent, paid in cash.
10 Record the entry for transfer of Jobs 306 and 307 to Finished Goods Inventory.
11 Record the Cost of goods sold for Job 306.
12 Record the revenue from the sale of Job 306.
13 Record the entry for assignment of any underapplied or overapplied overhead to the Cost of Goods Sold.
Note : = journal entry has been entered
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
Direct materials used
Direct labor used
Factory overhead applied
Total manufacturing costs 0
Add: Work in process March 31
Total cost of work in process 0
Less: Work in process April 30
Cost of goods manufactured $0