Question

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 31 346.000 9,500 55,000 42.000 18,200 33,700 Inventories Raw materials Work in process Finished goods Activities and Information for May Raw materiale purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead coats Sales (received in cash) Predetermined overhead rate based on direct labor cost 188.000 200,000 16,000 46,000 95,500 1.100.000 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. 3. Cost of goods manufactured 4. Cost of goods sold." 5. Gross profit

Answer 1

	Raw materials (RM)						Work in Process (WIP)
RM-April 30	46000					WIP-April 30	9500
RM purchases	188000					DM used	176000
		16000	Indirect materials			DL used	154000
		176000	DM used			Overhead applied	84700	406000	Cost of goods manuf.
RM-May 31	42000					WIP-May 31	18200
	Finished goods (FG)						Factory Overhead
FG-April 30	55000					Indirect materials	16000	84700	Overhead applied
Cost of goods manuf.	406000					Indirect labor	46000
		427300	Cost of goods sold			Other overhead costs	95500
FG-May 31	33700
						Underapplied OH	72800
Income Statement (Partial)
Sales	1100000
Cost of goods sold	427300
Gross Profit	672700