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 $ $ 47,000 9,100 66,000 58,000 19, 200 34,400 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 189,000 200,000 17,000 46,000 102,000 1,300,000 55% mpute the following amounts for the month of May using T-accounts. Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold.* Gross profit.

Answer 1

	Raw materials (RM)						Work in Process (WIP)
RM-April 30	47000	17000	Indirect materials			WIP-April 30	9100	389600	Cost of goods manuf.
RM purchases	189000	161000	DM used			DM used	161000
						DL used	154000
						Overhead applied	84700
RM-May 31	58000					WIP-May 31	19200
	Finished goods (FG)						Factory Overhead
FG-April 30	66000	421200	Cost of goods sold			Indirect materials	17000	84700	Overhead applied
Cost of goods manuf.	389600					Indirect labor	46000
						Other overhead costs	102000
FG-May 31	34400
						Underapplied OH	80300
Income Statement (Partial)
Sales	1300000
Cost of goods sold	421200
Gross Profit	878800
2
For Raw materials:
	Debit	Credit
Raw materials inventory	189000
Cash		189000
Work in Process inventory	161000		=47000+189000-17000-58000
Raw materials inventory		161000
Factory overhead	17000
Raw materials inventory		17000
3
For Labor:
	Debit	Credit
Work in Process inventory	154000		=200000-46000
Factory wages payable		154000
(To record direct labor usage)
Factory overhead	46000
Factory wages payable		46000
(To record indirect labor usage)
Factory wages payable	200000
Cash		200000
(To record payroll paid in cash)
4
For overhead:
	Debit	Credit
Factory overhead	102000
Other accounts		102000
(To record other overhead)
Work in Process inventory	84700		=(200000-46000)*55%
Factory overhead		84700
(To record applied overhead)