Problem 19-1A Production costs computed and recorded; reports prepared LO C2, P1

Question

Problem 19-1A 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 $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 cash in April. Costs of the three jobs worked on in April follow.

Problem 19-1A Part 4

4.1 Compute gross profit for April.

4.2 Show how to present the inventories on the April 30 balance sheet.

Job 306 Job 307 Job 308 Balances on March 31 Direct materials $ 27,000 $ 45,000 Direct labor 21,000 19,000 Applied overhead 10,500 9,500 Costs during April Direct materials 139,000 215,000 $ 105,000 Direct labor 103,000 152,000 104,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process

Explanation / Answer

4.1) Compute gross profit for april :

4.2 Show how to present the inventories on the April 30 balance sheet.

Raw mateiral inventory = (81000+530000-459000) = 152000

Work in process inventory= (105000+104000+52000) = 261000

Finished goods inventory = (73500+443000) = 516500

Sales 675000 Less: Cost of goods sold Direct material (27000+139000) (166000) Direct labour (21000+103000) (124000) Overhead (10500+51500) (62000) Gross profit 323000

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