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 $ $ 26,000 9,700 69,000 34,000 18,000 33, 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 180,000 300,000 8,000 69,000 114,500 1,300,000 558 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. Raw Materials (RM) Work in Process (WIP) Finished Goods (FG) Inventory Factory Overhead Income statement (partial)

Answer 1

	Raw materials (RM)						Work in Process (WIP)
RM-April 30	26000					WIP-April 30	9700
RM purchases	180000					DM used	164000
		8000	Indirect materials			DL used	231000
		164000	DM used			Overhead applied	127050	513750	Cost of goods manuf.
RM-May 31	34000					WIP-May 31	18000
	Finished goods (FG)						Factory Overhead
FG-April 30	69000					Indirect materials	8000	127050	Overhead applied
Cost of goods manuf.	513750					Indirect labor	69000
		549350	Cost of goods sold			Other overhead costs	114500
FG-May 31	33400
						Underapplied OH	64450
Income Statement (Partial)
Sales	1300000
Cost of goods sold	549350
Gross Profit	750650