PROBLEM SET A
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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.
Problem 15-1A
Production costs computed
and recorded; reports
prepared
P1 P2 P3 P4
Chapter 15 Job Order Costing and Analysis
599
Job 306
Job 307
Job 308
$ 29,000
20,000
10,000
$ 35,000
18,000
9,000
Balances on March 31
Direct materials
Direct labor.
Applied overhead.
Costs during April
Direct materials
Direct labor.
Applied overhead.
Status on April 30
135,000
85,000
220,000
150,000
?
Finished (unsold)
$100,000
105,000
?
Finished (sold)
In process
Required
1. 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).
2. Prepare journal entries for the month of April to record the following.
a. Materials purchases (on credit).
b. Direct materials used in production.
c. Direct labor paid and assigned to Work in Process Inventory.
d. Indirect labor paid and assigned to Factory Overhead.
e. Overhead costs applied to Work in Process Inventory.
f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in
cash.)
g. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
h. Cost of goods sold for Job 306.
i. Revenue from the sale of Job 306.
j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The
amount is not material.)
3. Prepare a schedule of cost of goods manufactured.
4. Compute gross profit for April. Show how to present the inventories on the April 30 balance sheet.
5. Over- or underapplied overhead is closed to Cost of Goods Sold. Is this adjustment also posted to
individual job cost sheets?
Check (2]) $5,000
underapplied
(3) Cost of goods
manufactured $828.500

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