Question

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 Inventories Raw materials $ 47,000 $ 43,000 Work in process 9,000 19,200 Finished goods 68,000 34,800 Activities and information for May Raw materials purchases (paid with cash) 175,000 Factory payroll (paid with cash) 150,000 Factory overhead Indirect materials 16,000 Indirect labor 34,500 Other overhead costs 90,000 Sales (received in cash) 1,100,000 Predetermined overhead rate based on direct labor cost 55 % Compute the following amounts for the month of May using T-accounts. Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold.* Gross profit. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead. Next Visit question map Question 5 linked to 6 7 and 8 of 17 Total 5 6 7 8 of 17 Prev

Answer 1

	Raw materials (RM)						Work in Process (WIP)
RM-April 30	47000					WIP-April 30	9000
RM purchases	175000					DM used	163000
		16000	Indirect materials			DL used	115500
		163000	DM used			Overhead applied	63525	331825	Cost of goods manuf.
RM-May 31	43000					WIP-May 31	19200
	Finished goods (FG)						Factory Overhead
FG-April 30	68000					Indirect materials	16000	63525	Overhead applied
Cost of goods manuf.	331825					Indirect labor	34500
		365025	Cost of goods sold			Other overhead costs	90000
FG-May 31	34800
						Underapplied OH	76975
Income Statement (Partial)
Sales	1100000
Cost of goods sold	365025
Gross Profit	734975