Question

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.

Saved 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 $40,000 9,900 64,000 32,000 20,600 35,000 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 191,000 250,000 7,000 57,500 107,500 1,100,000 558 1. Direct labor usage. 2. Indirect labor usage. 3. Total payroll paid in cash. Prepare journal entries for the above transactions for the month of May. View transaction list Journal entry worksheet 2 3 Prev 5º6 of 7 Next >

Answer 1

Transaction	General Journal	Debit	Credit
1.	Work in Process Inventory	$192500
	Factory Wages Payable		$192500
2.	Factory Overhead	$57500
	Factory Wages Payable		$57500
3.	Factory Wages Payable	$250000
	Cash		$250000

Direct labor is equal to total payroll ($250000) less Indirect labor ($57500) = $192500