Question

Please show calculations on how you obtained the answers for support.
Required information [The following information applies to the questions displayed below.] art 1 of 4 The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. 47 pints April 30 May 31 $ $ 47,000 10,000 62,000 35,000 20,400 33,400 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 192,000 150,000 12,000 34,500 97,500 1,400,000 55%

Answer 1

Raw Materials (RM)					Work in process (WIP )
Apr-30	$ 47,000	$ 12,000	Indirect Materials		Apr-30	$ 10,000	$ 360,625	cost of goods manf.
RM purchase	$ 192,000	$ 192,000	DM used		DM used (see note 1)	$ 192,000		( see note 3)
			( see note 1 )		DL used (see note 2)	$ 115,500
					Overhead applied (see note 3)	$ 63,525
May-31	$ 35,000				May-31	$ 20,400

Finished Goods (FG)Inventory					Factory Overhead
Apr-30	$62,000	$ 389,225	Cost of goods sold		indirect materials	$ 12,000	$ 63,525	overhead applied
cost of goods manf.	$ 360,625		( see note 4 )		indirect labor	$ 34,500		( see note 3 )
( see note 3)					other overheads cost	$ 97500
May-31	$ 33,400				under applied ( see note 6 )	$ 80,475

Factory Payroll
Factory payroll	$ 150,000	$ 34,500	indirect labor
( Bal in fig )		$ 115,500	DL used
			( see note 2 )

Income statement (Partial )
Sales	$ 1,400,000
Cost of goods sold( see note 4 )	($389,225)
Gross profit	$ 1,010,775

ALL EXPLANATION IS GIVEN BELOW :

NOTES :

1)	Cost of direct materials used :
	Beginning raw materials inventory	$ 47,000
	Add: purchase	$ 192,000
	Raw materials available	$ 239,000
	less: Ending raw materials inventory	($35,000)
	Total raw materials used	$ 204,000
	less: Indirect materials used	($12,000)
	Cost of direct materials used	$ 192,000
2)	Cost of direct labor used :
	Total factory payroll	$ 150,000
	less: indirect labor	($ 34,500)
	Cost of direct labor used	$ 115,500
3)	Cost of goods manufactured :
	Beginning work in process inventory	$ 10,000
	Add: Direct materials( see note 1 )	$ 192,000
	Add: Direct labor (see note 2 )	$ 115,500
	Add: Overhead applied ($115,500*55%)	$ 63,525
	( 55 % of direct labor cost )
	Total cost of work in process	$ 381,025
	Less: Ending work in process inventory	($20,400)
	Cost of goods manufactured	$ 360,625
4)	Cost of goods sold :
	Beginning finished goods inventory	$ 62,000
	Add: Cost of goods manufactured( see note 3)	$ 360,625
	Less: Ending Finished goods inventory	($33,400)
	cost of goods sold	$ 389,225
5)	Gross profit :
	Sales	$ 1,400,000
	less: Cost of goods sold( see note 4 )	($389,225)
	Gross profit	$ 1,010,775
6)	Actual overhead incurred :
	Indirect materials	$ 12,000
	Indirect labor	$ 34,500
	other Overhead costs	$ 97,500
	Total actual overhead incurred	$ 144,000
	Less: Overhead applied (see note 3 )	($ 63,525)
	Under applied overhead	$ 80,475