Required information Problem 2-1A Production costs computed and recorded; report

Question

Required information Problem 2-1A 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 $80,000. Raw materials purchases in April are $540,000, and factory payroll cost in April is $381,000. Overhead costs incurred in April are: indirect materials, $52,000; indirect labor $21,000; factory rent, $39,000; factory utilities, $19,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $695,000 cash in April. Costs of the three jobs worked on in April follow 306 Job 307 ob 308 Balances on March 31 Direct materials Direct labor Applied overhead 27,000 43,000 15,000 7,500 23,000 11,500 Costs during Apri1 Direct materials Direct labor Applied overhead Status on April 38 131,000 220,00 $105,000 102,000 Finished (sold) 154,800 104,000 Finished In process (unsold)

Explanation / Answer

job 306 job307 job308 April total From March Direct material $27,000 $43,000 $70,000 Direct labor $23,000 $15,000 $38,000 Applied overhead $11,500 $7,500 $19,000 Beginning goods in process $61,500 $65,500 $127,000 For April $0 Direct material $131,000 $220,000 $105,000 $456,000 Direct labor $102,000 $154,000 $104,000 $360,000 Applied overhead $51,000 $77,500 $52,000 $180,500 Total cost added in April $284,000 $451,500 $261,000 $996,500 Total costs(April30) $345,500 $517,000 $261,000 $1,123,500 Status on April 30 Sold Finished in process April cost included in cost of goods sold Finishedgoods inventory Work in process Error made in simple addition Job 307 Beginning goods in process should be $65500 Total cost (Aoril 30) $517,000 In order to avaoid error, please use excel for calculation No. Transaction General Journal Debit Credit 1 a Raw materials inventory $540,000 Accounts payable $540,000 2 b Work in process inventory $456,000 Raw materials inventory $456,000 3 c Work in process inventory $360,000 Wages payable $360,000 4 d Factory overhead $21,000 Wages expense $21,000 5 e Work in process inventory $180,000 Factory overhead $180,000 6 f(1) Factory overhead $52,000 Raw material inventory $52,000 7 f(2) Factoty overhead $39,000 Rent expense $39,000 8 f(3) Factory overhead $19,000 Utilities expense $19,000 9 f(4) Factory overhead $59,000 Depreciation expense-Factory equipment $59,000 10 g Finished goods inventory $862,500 (345500+517000) Work in process $862,500 11 h Cost of goods sold $345,500 Finished goods inventory $345,500 12 i Cash $695,000 Sales $695,000 13 j Cost of goods sold $10,000 Factory overhead $10,000 There was sipmle arithmatic error in calculating transfer of work in process to finished goods To avoid errors, use excel for all calculation

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