Question

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system 18, see 34.ee Inventories Raw materials Work in process Finished goods Activities and information for May Raw waterials 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 COSE 175.00 3ae.ee als 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) TI 0 Finished Goods (FG) Inventory Factory Overhead

Answer 1

a		Raw Material (RM)
	Particulars	Amount	Particulars	Amount
	Opening stock	42,000	By WIP	168,000
	Raw materail purchases	175,000	Closing Stock	49,000
		217,000		217,000
		Work in progress (WIP)
	Particulars	Amount	Particulars	Amount
	Opening WIP	9,200	By FG	158,400
	Raw materail	168,000	Closing WIP	18,800
		177,200		177,200
		Finished Goods (FG) Inventory
	Particulars	Amount	Particulars	Amount
	Opening FG	68,000	By Sales	192,300
	WIP	158,400	Closing FG	34,100
		226,400		226,400
	Cost of material used		192300
b	Cost of direct labour used =		300000
c	Cost of Goods Manufactured
	Material
	Closing FG	34,100
	Sales	192,300
	Less: Opening FG	-68,000
		158,400
	Cost of labour	300000
	Indirect cost	176000
	Cost of Goods Manufactured	634,400
d	Cost of Goods Sold
	Material	192,300
	Cost of labour	300,000
	Indirect cost	176,000
		668,300
e	Gross Profit
	Sales	1300000
	Cost of Goods Sold	668,300
	Gross Profit	631,700
f	Actual Overhead	175000
	Less: Budgeted Overhead	165000
	Underapplied overehead	10000