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 $80,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $365,000. Overhead costs incurred in April are: indirect materials, $53,000; indirect labor, $27,000; factory rent, $32,000; factory utilities, $20,000; and factory equipment depreciation, $53,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow.
Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 25,000 $ 40,000
Direct labor 25,000 18,000
Applied overhead 12,500 9,000
Costs during April
Direct materials 131,000 205,000 $105,000
Direct labor 105,000 152,000 101,000
Applied overhead ? ? ?
Status on April 30
Finished (sold) Finished (unsold)
In process
Problem 15-1A Part 1
Required:
Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).
Answer:
Job No 306 351,000 Cost Of Goods Sold
Job No 307 500,000 Finished Goods Inventory
Job No 308 256,500 Work In Process Inventory
Explanation:
We add the March balance and the April balances for each of the jobs to get the desired results.
Marcelino Co
Job No 306
March
Direct Materials 25000
Direct Labor 25000
Applied Overhead 12500
Opening Work In Process 62500
April
Direct Materials 131000
Direct Labor 105000
Applied Overhead (50% of 105,000) 52,500
Total Costs Added In April 288500
Total Costs 351,000
Status on April 30 Finished & Sold
Included in Cost Of Goods Sold
Job No 307
March
Direct Materials 40000
Direct Labor 18000
Applied Overhead 9000
Opening Work In Process 67,000
April
Direct Materials 205000
Direct Labor 152000
Applied Overhead (50% of 152,000) 76,000
Total Costs Added In April 433,000
Total Costs 500,000
Status on April 30 Finished & Unsold
Included in Finished Goods Inventory
Job No 308
March
Direct Materials ------
Direct Labor --------
Applied Overhead -------
Opening Work In Process ------
April
Direct Materials 105000
Direct Labor 101000
Applied Overhead (50% of 101,000) 50,500
Total Costs Added In April 256,500
Total Costs 256,500
Status on April 30 In Process
Included in Work In Process Inventory
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