Question

Saved Required information Use the following information to answer questions [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 $ $26, 000 9,200 53,000 40,000 19,500 33, 890 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 170,000 380,000 16,000 69,000 94, 000 1,500,000 55% Exercise 15-7 Cost flows in a job order costing system LO P1, P2, P3, P4 Compute the following amounts for the month of May using T-accounts. 1. Cost of direct materials used. 2. Cost of direct labor used. Prev 1 2 of 10 8 Next >

Answer 1

Please find below table useful to compute desired results: -

C D F 40000 19500 33800 Beginning raw materials =B2 Raw material purchases =C6 Ending Raw materials balance =C2 Raw Materials Indirect Materials Direct Materials used =C9 =F2+F3-F4-H2 170000 300000 Cash paid =C7 Factory Payroll Indirect Labor Direct Labor used =C10 1=F7-H7 Factory overhead 16000 69000 94000 1500000 =55/100 Overhead applied =C9 =H8*C13 A B 1 Inventories: 2 Raw materials 26000 3 Work in process 9200 4 Finished goods 53000 5 Activities and information for May: 6 Raw materials purchases 7 Factory Payroll 8 Factory overhead 9 Indirect materials 10 Indirect Labor 11 Other Overhead costs 12 Sales 13 Predetermined overhead rate 14 15 Cost of direct materials used =H3 16 Cost of direct labor used 17 Cost of goods manufactured =H17 18 Cost of goods sold =H24 19 Gross profit =B24 20 Income statement (Partial) 22 Sales =C12 23 Less: Cost of goods sold =H24 24 Gross Profit =B22-B23 =H8*C13 Indirect Material Indirect Labor Other overhead costs Underapplied overhead osts =C10 =C11 =SUM(F11-F13)-H11 =B3 Work in Process Cost of goods manufactured =SUM(F17-F20)-F21 Beg. WIP Direct material used Direct Labor Used Overhead applied Ending Balance =H3 =H8 =H11 =C3 21 Finished Goods Cost of goods sold =F24+F25-F26 25 Beg. Balance Cost of goods manufactured End. Balance =B4 =H17 =C4

End results would be as follows: -

C D 26,000 9,200 53,000 40.000 19,500 33.800 Beginning raw materials Raw material purchases Ending Raw materials balance F Raw Materials 26,000 Indirect Materials 170,000 Direct Materials used 40,000 16,000 140,000 170,000 300,000 Cash paid Factory Payroll 300,000 Indirect Labor Direct Labor used 69.000 231,000 А 1 Inventories: 2 Raw materials 3 Work in process 4 Finished goods 5 Activities and information for May: 6 Raw materials purchases 7 Factory Payroll 8 Factory overhead 9 Indirect materials 10 Indirect Labor 11 Other Overhead costs 12 Sales 13 Predetermined overhead rate 14 15 Cost of direct materials used 16 Cost of direct labor used 17 Cost of goods manufactured 18 Cost of goods sold 19 Gross profit 16.000 69,000 94.000 1,500,000 55% 127,050 Indirect Material Indirect Labor Other overhead costs Underapplied overhead Factory overhead 16,000 Overhead applied 69,000 94.000 51.950 140.000 231,000 487.750 506,950 993,050 Beg. WIP Direct material used Direct Labor Used Overhead applied Ending Balance Work in Process 9,200 Cost of goods manufactured | 487,750 140,000 231,000 127,050 19,500 20 21 Income statement (Partial) Sales 1,500,000 Less: Cost of goods sold 506.950 24 Gross Profit 993,050 506,950 Finished Goods 53,000 Cost of goods sold 487,750 33.800 Beg. Balance Cost of goods manufactured End. Balance 25