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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	$	32,000			$	58,000
Work in process		9,100				19,100
Finished goods		65,000				33,200
Activities and information for May
Raw materials purchases (paid with cash)						196,000
Factory payroll (paid with cash)						100,000
Factory overhead
Indirect materials						18,000
Indirect labor						23,000
Other overhead costs						119,500
Sales (received in cash)						1,800,000
Predetermined overhead rate based on direct labor cost						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.
6. Overapplied or underapplied overhead.

  
*Do not consider any underapplied or overapplied overhead.

Raw Materials (RM)					Work in Process (WIP)
April 30			Indirect materials		April 30			Cost of goods manuf.
RM purchases			DM used		DM used
					DL used
					Overhead applied
May 31					May 31
Finished Goods (FG) Inventory					Factory Overhead
April 30			Cost of goods solds		Indirect materials			Overhead applied
Cost of goods manuf.					Indirect labor
					Other overhead costs
May 31
					Underapplied OH

Income statement (partial)
Sales
Cost of goods sold
Gross profit	_____

Answer 1

2 RM-April 30 3 RM purchases Raw Materials(RM) $ 32,000 $ $ 196,000 $ 18,000 Indirect Material 152,000 DM used(Bal. Fig.) WIP-Apr 30 DM used(Bal. Fig.) DL used(Bal Fig.) Overhead Applied WIP-May 31 н Work In Process(WIP) $ 9,100 $ 152,000 $ 77,000 $ 261,350 Cost of goods Manufactured(Bal Fig.) $ 42,350 $ 19,100 5 RM-May 31 $ 58,000 8 Factory Payroll Factory Payroll $ 100,000 $ $ 23,000 Indirect Labor 77,000 DL used(Bal Fig.) Finished Goods(FG) FG-April 30 $ 65,000 Cost of goods Manufactured(Bal Fig.) $ 261,350 293,150 Cost of goods sold(Bal Fig.) FG-May 31 $ 33,200 $ 14 Indirect Materials 15 Indirect Labor 16 Other Overhead costs Factory Overhead $ 18,000 $ 23,000 $ 119,500 42,350 Overhead Applied (77000*55%) 18 Underapplied OH $ 118,150

Income Statement-Partial 22 Sales $ 23 Less:Cost of goods sold $ -4 Gross Profit $ 1,800,000 (293,150) 1,506,850 7 Cost of direct material used 8 Cost of diect labor used 9 cost of goods manufactured Cost of goods sold 1 Gross Profit 2 Underapplied Overhead $ $ $ $ $ $ 152,000 77,000 261,350 293,150 1,506,850 118,150

No. Credit Account titles 1 Raw Materials Inventory Cash Debit $ 196,000 $ 196,000.0 $ 152,000 2 Work In Process Inventory Raw Materials Inventory $ 152,000.0 $ 18,000 3 Factory Overhead Raw Materials Inventory $ 18,000.0 $ 77,000 4 Work In Process Inventory Factory Wages Payable $ 77,000.0 $ 23,000 5 Factory Overhead Factory Wages Payable $ 23,000.0 $ 100,000 6 Factory Wages Payable Cash $ 100,000.0 $ 119,500 7 Facory Overhead Other Accounts $ 119,500.0 $ 42,350 8 Work In Process Factory Overhead (77000*55%) $ 42,350.0 $ 118,150 9 Cost of goods sold Factory Overhead $ 118,150.0