Question

Required information [The following information applies to the questions displayed below.) The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 $ $43,000 9,100 54,000 37,000 18,400 34,800 Inventories Raw materials Work in process Finished goods Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost 180,000 200,000 8,000 46,000 103,500 2,000,000 55% Compute the following amounts for the month of May using T-accounts. 1. Cost of direct materials used. 2. Cost of direct labor used. 3. Cost of goods manufactured. 4. Cost of goods sold.* 5. Gross profit.

Answer 1

	Raw materials (RM)						Work in Process (WIP)
RM-April 30	43000	8000	Indirect materials			WIP-April 30	9100	407400	Cost of goods manuf.
RM purchases	180000	178000	DM used			DM used	178000
						DL used	154000
						Overhead applied	84700
RM-May 31	37000					WIP-May 31	18400
	Finished goods (FG)						Factory Overhead
FG-April 30	54000	426600	Cost of goods sold			Indirect materials	8000	84700	Overhead applied
Cost of goods manuf.	407400					Indirect labor	46000
						Other overhead costs	103500
FG-May 31	34800
						Underapplied OH	72800
Income Statement (Partial)
Sales	2000000
Cost of goods sold	426600
Gross Profit	1573400