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, 9,400 64,000 43, eee 20,500 34,5ee 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 184, eee 300,000 8,eee 69, eee 95,5ee 1,480, eee 55% 1. Incurred other overhead costs (record credit to Other Accounts). 2. Applied overhead to work in process. Prepare journal entries for the above transactions for the month of May. View transaction ist

Answer 1

Ans.	Transaction	General Journal	Debit	Credit
	1	Factory overhead	$95,500
		Other accounts		$95,500
		(To record other overhead costs)
	2	Work in process inventory	$127,050
		Factory overhead		$127,050
		(To record factory overhead applied)
	*Working notes for Transaction 2:
	*Calculations for direct labor cost:
		Factory payroll	$300,000
		Less: Indirect labor	-$69,000
		Direct labor cost	$231,000
	Overhead applied   = Direct labor cost * Predetermined overhead rate
		$231,000 * 55%
		$127,050