Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1
ID: 2608859 • Letter: P
Question
Problem 15-1A 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 $85,000. Raw materials purchases in April are $550,000, and factory payroll cost in April is $367,000. Overhead costs incurred in April are: indirect materials, $57,000; indirect labor, $29,000; factory rent, $34,000; factory utilities, $22,000; and factory equipment depreciation, $53,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $630,000 cash in April. Costs of the three jobs worked on in April follow.
2. Prepare journal entries for the month of April to record the above transactions.
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.
Explanation / Answer
Job 306
Job 307
Job 308
April Total
From March
Direct Materials
31000
35000
66000
Direct Labor
21000
18000
39000
Applied overhead
10500
9000
19500
Beginning goods in process
62500
62000
0
124500
For April
Direct Materials
130000
205000
110000
445000
Direct Labor
105000
152000
100000
357000
Applied overhead
52500
76000
50000
178500
Total costs added in April
287500
433000
260000
980500
Total costs (April 30)
350000
495000
260000
1105000
Status on April 30
Finished (sold)
Finished (unsold)
In process
April 30 cost included in:
Cost of goods sold
Finished goods inventory
Goods in process inventory
Transaction
General Journal
Debit
Credit
a
Raw materials inventory
550000
Account Payable
550000
b
Work in process inventory
445000
Raw materials inventory
4450000
c
Work in process inventory
357000
Cash
357000
d
Factory overhead
29000
Cash
29000
e
Work in process inventory
1785000
Factory overhead
1785000
F(1)
Factory overhead
57000
Raw materials inventory
57000
F(2)
Factory overhead
22000
Cash
22000
F(3)
Factory overhead
53000
Accumulated depreciation- factory equipment
53000
F(4)
Factory overhead
34000
Cash
34000
g
Finished goods inventory
845000
Work in process inventory
845000
h
Cost of goods sold
350000
Finished goods inventory
350000
i
Cash
630000
Sales
630000
j
Cost of goods sold
18500
Factory overhead
18500
Explanation:
g. 350000 + 495000 = 845000
j. 178500 – (57000 + 29000 + 34000 +24000 + 53000) = 18500
Job 306
Job 307
Job 308
April Total
From March
Direct Materials
31000
35000
66000
Direct Labor
21000
18000
39000
Applied overhead
10500
9000
19500
Beginning goods in process
62500
62000
0
124500
For April
Direct Materials
130000
205000
110000
445000
Direct Labor
105000
152000
100000
357000
Applied overhead
52500
76000
50000
178500
Total costs added in April
287500
433000
260000
980500
Total costs (April 30)
350000
495000
260000
1105000
Status on April 30
Finished (sold)
Finished (unsold)
In process
April 30 cost included in:
Cost of goods sold
Finished goods inventory
Goods in process inventory