Question

Marcelino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are
$500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect
materials, $50,000; indirect labor, $23,000; factory rent, $32,000; factory utilities, $19,000; and factory
equipment depreciation, $51,000. 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 $29,000 $35,000
Direct labor 20,000 18,000
Applied overhead 10,000 9,000
Costs during April
Direct materials 135,000 220,000 $100,000
Direct labor 85,000 150,000 105,000
Applied overhead 42,500 75,000 52,500
Status on April 30 Finished (sold) Finished (unsold) In process


- Prepare journal entries to record the transactions of Marcelino Company during the month of April.

- Calculate the total cost, and account classification for each job worked on during April.

- Prepare a schedule of cost of goods manufactured for Marcelino Company during the month of April.

- Calculate the gross profit on the sale of job(s) during April.

Answer 1

Answer:

A journal entry was prepared to  record the transactions of Marcelino Company during the month of April with the scheduled cost of goods.

Explanation:

Solution

The first step is to take is  preparing  a journal entries to record the transactions of Marcelino Company during the month of April.

(a)  JOURNAL ENTRIES OF MARCELINO COMPANY

                                Job 306        Job 307      Job 308     April Total

Balances on 31st

    March

Direct materials       29000    35000                               64000

Direct labor                20000    18000                                38000

Applied overhead      10000      9000

(b)

Costs during April

Direct materials           135000    220000   100000    455000

Direct labor                   85000    150000     105000 340000

Applied overhead            42500    75000    52500 170000

Cost of Manufacturing    32150      507000  257500 1086000

Status on April 30     Finished (sold)Finished (unsold)In process

April Profit Statement

Manufacturing Cost               1086000

Less Closing WIP job 306 257500

Less Finished goods 307 507000

ADD overhead under applied 5000

Cost Of Goods sold           326500

Sales Value                           635000

Gross Profit                           308500

OverheadActualy incured  

Indirect material                    50000

Indirect labor                          23000

Factory rent                            32000

Factory Utility                          19000

Factory equipment             51000

OverheadActualy incured     175000

Overhead applied             170000

Overhead under applied      5000

We create another Journal for Marcelino Company

Journal                       Credit               Debit

Material Control        500000

Account Payable                               500000

Overhead control      175000

Overhead payable                              175000

Wage Control              363000

Wage Payable                                      363000

Work in progress       455000

Material Control                                    455000

Work in progress        340000

Direct labor                                            38000

Work in progress         170000  

Applied overhead                                 170000

Overhead under applied 5000  

Cost of Goods sold                                 5000

Finished Goods          507000  

Work in progress                                    507000