Question

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 $ $43,000 10,200 63,000 52,000 21,300 35,600 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 210,000 345,000 15,000 80,000 120,000 1,400,000 70% 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

RM- April 30 RM - Purchases Raw Materials (RM) $43,000 I $ 15,000 Indirect materials $210,000 & 186,000 IDM used RM - May 31 $52,000 facto factory Payroll 1 $345,000 $ 80,000 $265,000 Indirect labor DL used $ 0 Indirect material factory Over head $15,000 185,500 Oves applied $80,000 Indirect labor her overhead costs & 120,000 Underapplied OH 4 29,500 Income statement (Partial) $ 1,400,000 $ 652,800 $747,200 sold Less: Sales Cost Gooss of goods profit

in Process (wil) $625,400 Cost of goods manuf WIP - April 30 DM used DL used Overhead applied WIP - May 31 Work $10,000 $ 186,000 $265,000 $ 185,500 $21,300 finished Goods CFG) FG - April 30 $63,000 $ 652,800 Cost of Cost of goods man of $625,400 goods sold FG. - May 31 $35,600

Calculation: 1. Cost of direct materials used Beginning raw materials inventory Add: Purchases Raw materials available Less: Ending raw materials inventory Total raw materials used Less: Indirect materials used Cost ok direct materials used $ 43,000 $ 210,000 4 253,000 $ 52,000 $ 201,000 $ 15,000 & 186,000 Cost of Total Less: Cost direct labor used factory payroll Indirect labor of direct labor used $ 345,000 $ 80,000 # 265,000 3. Cost of goods manufactured Beginning work in process inventory Add: Direct materials Add: Direct labor Add: Overhead applied (70% direct labor Total cost of work in process Less: Ending work in process inventory Cost of goods manufactured $ 10,200 $ 16,000 $ 265,000 $ 185,500 & 646,700 $ 21,300 & 625, you Cost goods inventory Cost of goods sold. Beginning finished gooels inventory Addi Cost of goods manufactured Less: Ending finished goods inventory Cast of goods sold & 63,000 $ 625, 400 $ 35,600 4 65 2,900

5. Gross profit Sales Less: Cost Gross of goods sold profit & 1,400,000 $ 652,800 $ 747,200 6. Actual over head incurred Indirect materials Indirect labor Other over head costs Total actual overhead incurred Overhead applied Underapplied overhead & 15.000 $ 80,000 $ 120,000 $215.000 $ 185,500 & 29,500 Less: