Question

i need some help please

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 roducts and uses a job order costing system. April 30 May 31 $ 26,880 9,400 65,000 32,000 19,400 34,800 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 185,000 150,000 10,000 34,500 108,500 1,100,000 Exercise 02.7 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.

Answer 1

Answer.

a) Cost of Direct Material Used = Beg. Raw Mat. + Purchased) - Indirect Material Used - End. Raw Mat

= 26,000 +185,000 - 10,000 - 32,000 = $169,000

b) Cost of Direct Labor Used = Factory Payroll - Indirect labor used

= 150,000 - 34,500 = $115,500

c) Cost of Goods Manufactured = Direct Material used + Direct Labor Used + Factory overhead + Beg. W.I.P - end W.I.P

= 169,000 + 115,500 + 153,000 + 9,400 - 19,400 = $427,500

Factory overhead = Indirect Material + Ind. Labor + Other Overheads

= 10,000 + 34,500 +108,500 = $153,000

d) Cost of Goods Sold = Cost of Goods Manufactured + Beg. Finished Goods - Ending Finished Goods

= 427,500 + 65,000 - 34,800 = $4,57,700

e) Gross Profit = Sales - Cost of Goods Sold

=  $1,100,000 - $457,500 = $642,500
f) Overhead under Applied = $153,500 - $63525 = $89475

Overhead Applied = 55% of Direct Labor = $115,500 $\times$ 0.55 = $63,525

Actual Overhead = $153,000