Problem 151A Production costs computed and recorded reports

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 $82,000. Raw materials purchases in April are $580,000, and factory payroll cost in April is $381,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $25,000; factory rent, $31,000; factory utilities, $24,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $650,000 cash in April. Costs of the three jobs worked on in April follow.

rev: 03_15_2018_QC_CS-121813

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).

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

3. Prepare a schedule of cost of goods manufactured.

	Job 306	Job 307	Job 308
Balances on March 31
Direct materials		$	28,000			$	36,000
Direct labor			24,000				15,000
Applied overhead			12,000				7,500
Costs during April
Direct materials			139,000				205,000			$	100,000
Direct labor			103,000				152,000				101,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)	Finished (unsold)		In process

Solution

Job 306 Job 307 Job 308 April 1) total From March Direct materials 28,000 36,000 64,000 Direct labor 24,000 15,000 39,000 applied overhead 12,000 7,500 19,500 Beginning goods in process 64,000 58,500 122,500 For April Direct materials 139,000 205,000 100,000 444,000 Direct labor 103,000 152,000 101,000 356,000 applied overhead 51500 76000 50500 178,000 Total costs added in April 293,500 433,000 251,500 978,000 total costs (April 30) 357,500 491,500 251,500 1,100,500 Satus on april 30 fin(sold) fin(unsold) in process April costs included in : COGS finished WIP goods inventory 2) TR General journal Debit Credit a. Raw materials inventory 580,000 Accounts payable 580,000 b. Work in process inventory 444,000 Raw materials inventory 444,000 c. Work in process inventory 356,000 Cash 356,000 d. Factory overhead 25,000 cash 25,000 e. Factory overhead 178,000 work in process inventory 178,000 f. Factory overhead 172,000 Raw materials inventory 59,000 Cash 55,000 Accumulated Depreciation 58,000 g. finished goods inventory 849,000 Work in process inventory 849,000 h. Cost of goods sold 357,500 finished goods inventory 357,500 i. Cash 650,000 sales 650,000 j. cost of goods sold 19,000 Factory overhead 19,000 3) Schedule of goods of goods manufactured direct materials used 444,000 Direct labor used 356,000 factory overhead applied 178,000 total manufacturing costs 978,000 Add:work in process March 31 122,500 total cost of work in process 1,100,500 less:work in process April 30 251,500 cost of goods manufactured 849,000 Working notes Actual overhead indirect material 59,000 indirect labor 25,000 depreciation 58,000 Factory rent 31,000 factory utilities 24,000 total 197,000 overhead applied 178,000 under applied overhead 19,000