Question

how do i calculate?

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 $ $46,500 10,900 66,500 59,000 22,700 42,600 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 217,000 359,000 22,000 87,000 127,000 1,470,000 70% Determine whether there is over or underapplied overhead. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.

Answer 1

Factory Overhead
Actual Overhead	236000	190400	Applied overhead
Underapplied overhead	45600
2
	Debit	Credit
Cost of goods sold	45600
Factory Overhead		45600
Workings:
Direct labor cost	272000	=359000-87000
X Predetermined overhead rate	70%
Applied overhead	190400
Indirect materials	22000
Indirect labor	87000
Other overhead costs	127000
Actual Overhead	236000
Actual Overhead	236000
Less: Applied overhead	190400
Underapplied overhead	45600