
Product Cost:
The cost incurred on the production of a particular job or product is called product cost. The cost in production of a product usually involves raw material used, direct labor used and manufacturing
To determine:
Prepare
Preparation of schedule of cost of goods manufactured and partial income statement

Answer to Problem 1GLP
Solution:
1.
Accounts name | Debit | Credit |
Raw Materials Inventory | $500,000 | |
Accounts Payable | $500,000 | |
Work in Process Inventory | $455,000 | |
Raw Material Inventory | $455,000 | |
Work in Process Inventory | $340,000 | |
Cash | $340,000 | |
Work in Process Inventory | $170,000 | |
Manufacturing Overhead | $170,000 | |
Manufacturing Overhead | $50,000 | |
Raw Materials Inventory | $50,000 | |
Manufacturing Overhead | $23,000 | |
Cash | $23,000 | |
Manufacturing Overhead | $32,000 | |
Cash | $32,000 | |
Manufacturing Overhead | $19,000 | |
Cash | $19,000 | |
Manufacturing Overhead | $51,000 | |
Equipment |
$51,000 | |
Finished Goods Inventory | $828,500 | |
Work in Process Inventory | $828,500 | |
Cost of Goods Sold | $321,500 | |
Finished Goods Inventory | $321,500 | |
Cash | $635,000 | |
Sales | $635,000 | |
Cost of Goods Sold | $5,000 | |
Manufacturing Overhead | $5,000 |
2.
MARCELINO COMPANY Schedule of Cost of Goods Manufactured For Month Ended April 30 |
|
Direct Materials used | $455,000 |
Direct Labor used | $340,000 |
Manufacturing Overhead Applied | $170,000 |
Total |
$965,000 |
Add: Beginning balance of Work in Process on March 31 | $121,000 |
Total cost of Work in Process | $1,086,000 |
Less : Ending balance of Work in Process on April 30 | $257,500 |
Cost of Goods Manufactured | $828,500 |
3.
MARCELINO COMPANY Partial Income Statement For Month Ended April 30 |
|
Sales | $635,000 |
Less: Cost of Goods Sold ($321,500 + $5,000) | $326,500 |
Gross Profit | $308,500 |
Explanation of Solution
Explanation:
Computation of Production of Cost
Job 306 | Job 307 | Job 308 | Total | |
March 31 | ||||
Direct Materials | $29,000 | $35,000 | $64,000 | |
Direct Labor | $20,000 | $18,000 | $38,000 | |
Overhead Applied | $10,000 | $9,000 | $19,000 | |
Beginning goods in process | $59,000 | $62,000 | 0 | $121,000 |
During April | ||||
Direct Materials | $135,000 | $220,000 | $100,000 | $455,000 |
Direct Labor | $85,000 | $150,000 | $105,000 | $340,000 |
Overhead Applied | $42,500 | 75,000 | $52,500 | $170,000 |
$262,500 | $445,000 | $257,400 | $965,000 | |
Total Cost (April 30) | $321,500 | $507,000 | $257,500 | $1,086,000 |
Finished (sold ) |
Finished (Unsold) |
In Process |
Conclusion:
Hence it is concluded that the Marcelino Co. has completed jobs worth $828,500 (306 & 307) and transfer to finished goods inventory. Job 306 with cost of goods sold of $326,500 was sold on cash for $635,000 and earned gross profit of $308,500.
Want to see more full solutions like this?
Chapter 19 Solutions
Fundamental Accounting Principles -Hardcover
- Don't use AI please . solve this problarrow_forwardAccurate Answerarrow_forwardMichael Corporation has the following standards for its direct materials: 1. Standard Cost: $3.80 per pound 2. Standard Quantity: 6.00 pounds per product. During the most recent month, the company purchased and used 33,900 pounds of material in manufacturing 5,600 products, at a total cost of $131,900. Compute the materials quantity variance.arrow_forward
- Jenny leased equipment from Julio on December 31, 2015. The lease is a 10-year lease with annual payments of $150,000 due on December 31 of each year. The present value of the lease is $1,020,000. Jenny's incremental borrowing rate is 12% for this type of lease. The implicit rate of 10% is known by the lessee. What should be the balance in Jenny lease liability at December 31, 2016?arrow_forwardWhat is company total equity? Question answer accountingarrow_forwardWhat is summit ROE for 2023?arrow_forward
- Accounting MCQarrow_forwardGhana Company reported inventory of $60,000 at the beginning of 2023. During the year, it purchased inventory of $625,000 and sold inventory for $950,000. A count of inventory at the end of the year determined that the cost of inventory on hand was $50,000. What was Ghana's cost of goods sold for 2023?arrow_forwardSolve this Accounting MCQarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





