iew Favorites Tools Help Ko Questions 7-10 fof 16) The following information app

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iew Favorites Tools Help Ko Questions 7-10 fof 16) The following information applies to the questions displayed below. Marcelino Co's March 31 inventory of raw materials is $84,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $369,000. Overhead costs incurred in April are: indirect materials, $56,000, indirect labor, $23,000; factory rent, $31,000, factory utilities, $23.000, and factory equipment epreciation S54 The predetermined overhead ate s50% ofdirect labor cost :306 is sold for $670,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307Job 308 Balances on March 31 $ 42.000 18,000 9,000 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor 23,000 11500 132,000 94.000 215.000 150,000 $ 115.000 102.000 Applied overhead Status on April 30 Finished (sold) Finished (unsold) In process Required: 1. Determine the fotal of each production cost incurred fon Ápri (direct labor direct matenals, and applied ,

Explanation / Answer

Journal entries Tramsaction Account Titles Debit Credit a Material Inventory $530,000.00 Accounts Payable $530,000.00 b Work in process - Job 306 $132,000.00 Work in process - Job 307 $215,000.00 Work in process - Job 308 $115,000.00 Material Inventory $462,000.00 c Work in process - Job 306 $94,000.00 Work in process - Job 307 $150,000.00 Work in process - Job 308 $102,000.00 Cash $346,000.00 d Factory Overheads $23,000.00 Cash $23,000.00 e Work in process - Job 306 $47,000.00 Work in process - Job 307 $75,000.00 Work in process - Job 308 $51,000.00 Factory Overheads $173,000.00 f Factory Overheads $164,000.00 Material Inventory $56,000.00 Cash $54,000.00 Accumulated Depreciation - Equipment $54,000.00 g Finished Goods Inventory $843,500.00 Work in process - Job 306 $334,500.00 Work in process - Job 307 $509,000.00 h Cost of goods sold $334,500.00 Finished Goods Inventory $334,500.00 i Cash $670,000.00 Sales $670,000.00 j Cost of goods sold $14,000.00 Factory Overheads $14,000.00 Calculation of under or over applied overhead cost Applied Factory Overheads = Total direct labour cost for the April * 50% = $346000 * 50% = $173,000.00 Less : Actual Factory overhead incurred $187,000.00 Under-applied Factory Overhead cost $14,000.00

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