Question

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $510,000, and factory payroll cost in April is $368,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $29,000; factory rent, $39,000; factory utilities, $22,000; and factory equipment depreciation, $61,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $645,000 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 $31,000 $37,000
Direct labor 21,000 16,000
Applied overhead 10,500 8,000
Costs during April
Direct materials 130,000 215,000 $100,000
Direct labor 101,000 150,000 101,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (sold) In process

Required:
Prepare a schedule of cost of goods manufactured.

Answer 1

The preparation of Marcelino Co.'s Schedule of Cost of Goods Manufactured for April is as follows:

Schedule of Cost of Goods Manufactured:

Beginning Work in process          $123,500

Direct materials                             445,000

Direct labor                                    352,000

Applied overhead                          176,000

Ending Work in process               (251,500)

Cost of goods manufactured  $845,000

Calculating the cost of goods manufactured?

The cost of goods manufactured can be computed by adding the costs of direct materials, direct labor, and factory overhead to the beginning work in process inventory and subtracting the ending work in process inventory.

Data and Calculations:

March 31 Raw materials inventory = $81,000

Raw materials purchases = $510,000

Factory payroll cost = $368,000

Overhead costs:

Indirect materials =$56,000

Indirect labor, $29,000

Factory rent, $39,000

Factory utilities, $22,000

Factory equipment depreciation, $61,000

Total overhead costs = $207,000

Predetermined overhead rate = 50% of direct labor cost

Sales revenue of Job 306 = $645,000

Cost sheets of Job 306, Job 307, and Job 308

                                 Job 306         Job 307         Job 308           Total

Balances on March 31:

Direct materials        $31,000         $37,000                              $68,000

Direct labor                 21,000           16,000                                 37,000

Applied overhead      10,500            8,000                                  18,500

Total costs              $62,500         $61,000            $0             $123,500

Costs during April:

Direct materials       130,000         215,000     $100,000        445,000

Direct labor              101,000         150,000        101,000         352,000

Applied overhead   50,500           75,000         50,500          176,000

Total costs           $344,000      $501,000      $251,500    $1,096,500

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

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