Question

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The following information applies to the questions displayed below) 13 SO Compute the following amounts for the month of May using T- accounts 1. Cost of direct materials used. 2. Cost of direct labor used. 1. Cost of goods manufactured. Cost of goods sold." 6. Gross profit Overapplied or underapplied overhead. "Do not consider any underapplied or overapplied overhead.

Answer 1

Raw Materials (RM)
Beg. Bal.	$43,000	Factory Overheads	$15,000
RM Purchases	$210,000	Work-in process ($253,000 - $15,000 - $52,000)	$186,000
		End. Bal.	$52,000
	$253,000		$253,000
1. Cost of Direct materials used is $186,000.
Factory Payroll
Cash	$345,000	Factory Overheads	$80,000
		Work-in process ($345,000 - $80,000)	$265,000
	$345,000		$345,000
2. Cost of direct labor used is $265,000.
Factory Overheads
Raw Materials	$15,000
Factory Labor	$80,000	Cost of Goods Sold	$215,000
Other overhead costs	$120,000
	$215,000		$215,000
Income Statement (partial)
Sales Revenue	$1,400,000
Less: Cost of Goods Sold	($652,800)
Gross Profit	$747,200
5. Gross profit is $747,200
Actual overheads	$215,000
Less: Applied overheads	($185,500)
Underapplied overheads	$29,500
Underapplied overheads is $29,500

Work in Process (WIP)
Beg. Bal.	$10,200
Raw Materials	$186,000
Factory Overheads	$265,000	Finished Goods ($646,700 - $21,300)	$625,400
Manufacturing Overheads ($256,000*70/100)	$185,500
		End. Bal.	$21,300
	$646,700		$646,700
3. Cost of Goods Manufactured is $625,400
Finished Goods (FG)
Beg. Bal.	$63,000
Work-in process	$625,400	Cost of Goods Sold	$652,800
		End. Bal.	$35,600
	$688,400		$688,400
4. Cost of Goods Sold is $652,800.