Question

	April 30				May 31
Inventories
Raw materials	$	29,000			$	52,000
Work in process		9,200				18,000
Finished goods		50,000				34,000
Activities and information for May
Raw materials purchases (paid with cash)						177,000
Factory payroll (paid with cash)						150,000
Factory overhead
Indirect materials						9,000
Indirect labor						34,500
Other overhead costs						118,000
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.

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.

Answer 1

	Raw materials (RM)						Work in Process (WIP)
RM-April 30	29000					WIP-April 30	9200
RM purchases	177000					DM used	145000
		9000	Indirect materials			DL used	115500
		145000	DM used			Overhead applied	63525	315225	Cost of goods manuf.
RM-May 31	52000					WIP-May 31	18000
	Finished goods (FG)						Factory Overhead
FG-April 30	50000					Indirect materials	9000	63525	Overhead applied
Cost of goods manuf.	315225					Indirect labor	34500
		331225	Cost of goods sold			Other overhead costs	118000
FG-May 31	34000
						Underapplied OH	97975
Income Statement (Partial)
Sales	1100000
Cost of goods sold	331225
Gross Profit	768775