Carlberg Co.’s March 31 inventory of raw materials is $105,000. Raw materials purchases in April are $590,000, and factory payroll cost in April is $428,000. Overhead costs incurred in April are: indirect materials, $90,000; indirect labor, $38,000; factory rent, $70,000; factory utilities, $29,000; and factory equipment depreciation, $56,000. The predetermined overhead rate is 70% of direct labor cost. Job 306 is sold for $760,000 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 $ 39,000 $ 50,000 Direct labor 30,000 23,000 Applied overhead 21,000 16,100 Costs during April Direct materials 145,000 235,000 $ 110,000 Direct labor 105,000 175,000 110,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process

Job 306 is Cost of Goods Sold  403,500

Job 307 is Finished Goods Inventory 621,600    

Job 308 Is Goods Still in Process 287,000

Explanation:

Carlberg Co.

Cost of Goods Manufactured

For the Month of April

Opening Inventory Raw Materials $105,000

Purchases      Raw Materials          $ 590,000

Less Ending  Inventory                   $ 205,000

Direct Materials Used          490,000  (145,000+235,000 + $ 110,000 )

Direct Labor                     390,000 (105,000+ 175,000 + 110,000)

Applied Overhead (70% of DL)  273,000

Total Manufacturing Costs   $ 1153,000

Add Work in Process Mar 31     169,100

Cost of Goods Available For Manufacture 1322,100

Less Work in Process April 30   287,000

Cost of Goods Manufactured   $1035,100

We add the balances to get the required figures and then find out the cost of goods manufactured.

31 March Balances

                            Job 306           Job 307               Job 308

Direct materials $ 39,000         $ 50,000                      

Direct labor          30,000            23,000                      

Applied overhead 21,000            16,100                      

Beginning WIP         80,000            89,100

Costs during April

Direct materials 145,000             235,000               $ 110,000

Direct labor        105,000            175,000                   110,000

Applied overhead 73,500           122,500                   77,000

Costs Added In April  323,500      532,500                  287,000

Total Costs           403,500             621,600                    287,000

Status On April 30  Finished          Finished                 In Process

                                (sold)              (unsold)    

                            Cost Of Goods    Finished Goods       Goods In Process

                              Sold                       Inventory

Job 306 is Cost of Goods Sold

Job 307 is Finished Goods Inventory

Job 308 Is Goods Still in Process

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