Marcelino Co.\'s March 31 inventory of raw materials is $88,000. Raw materials p
ID: 2529911 • Letter: M
Question
Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $560,000, and factory payroll cost in April is $382,000. Overhead costs incurred in April are: indirect materials, $58,000; indirect labor, $20,000; factory rent, $33,000; factory utilities, $22,000; and factory equipment depreciation, $58,000. 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.
Problem 19-1A 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 . 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.
Explanation / Answer
Marcelino's Requirement 1 Job 306 Job 307 Job 308 April Total Balances on March 31 Direct Materials 27000 39000 66000 Direct labor 25000 18000 43000 Applied Manfuacturing overhead 12500 9000 21500 Costs during April Direct Materials 135000 215000 115000 465000 Direct labor 103000 155000 104000 362000 Applied Manfuacturing overhead 51500 77500 52000 181000 Total cost 354000 513500 271000 1138500 Requirement 2 In the books of Lyan Date Account Title & Explanation Debit Credit Amount in Amount in Raw material Inventory 560000 Material Purchase Accounts payable 560000 Work In process Inventory 465000 Materials used Raw Materials Inventory 465000 Wages 362000 Direct Labor Cash 362000 Work In process Inventory 362000 Direct Labor assigned Wages 362000 Wages 20000 Indirect Labor Cash 20000 Manufacturing overhead 20000 Indirect labor Manufacturing Wages 20000 Work In process Inventory 181000 Manufacturing overhead 181000 Factory Rent 33000 Factory Utiltities 22000 Cash 55000 Manufacturing Overhead 167000 Factory Rent 31000 Factory Utiltities 24000 Depreciation on Factory equipment 60000 Raw Material Inventory 52000 Finished goods Inventory 354000 Transfer of Job 306 & 307 Finished goods Inventory 513500 Work In process Inventory 867500 Cost of goods sold 354000 Finished goods Inventory 354000 Accounts receivable/Cash 680000 Revenue from sales Revenue from sales 680000 Cost of goods sold 6000 Overhead under applied Manufacturing Overhead 6000