Question

Exercise 15-13 Adjusting factory overhead LO P4 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 $ $48,000 11,280 68,888 62,000 23,300 45,600 220, 80e 365,000 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 25, eee 90,000 130,000 1,500,000 80% Determine whether there is over or underapplied overhead. Factory Overhead

Answer 1

1.

Applied factory overhead = $(365,000 - 90,000) * 80% = $220,000

Factory Overhead
Indirect materials	$25,000	Work in process	$220,000
Indirect labor	90,000
Other overhead costs	130,000
End.Bal.	$25,000

Underapplied factory overhead = $25,000

2.

Transaction	General Journal	Debit	Credit
1	Cost of goods sold	$25,000
	Manufacturing overhead		$25,000