Question

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 Inventories Raw materials $ 32,000 $ 60,000 Work in process 9,600 20,100 Finished goods 64,000 33,500 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 13,000 Indirect labor 46,000 Other overhead costs 99,500 Sales (received in cash) 1,200,000 Predetermined overhead rate based on direct labor cost 55 % Compute 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. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead.

Answer 1

RAW MATERIAL INVENTORY
Beginning Balance		32,000	Work in process inventory		130,000	(balancing figure)
Cash		171,000	Manufacturing Overheads		13,000
Ending Balance		60,000
Manufacturing Wages
Cash		200,000	Work in process Inventory		154,000	(balancing figure)
			Manufacturing Overheads		46,000
Ending balance		0
Manufacturing Overheads
Raw material Inv.		13,000	Work in process Inventory		84,700
Manufacturing wages		46,000	(154000*55%)
Cash		99,500
Balance (Balancing figure)		73,800
Work in Process inventory
Balance		9,600	Finished Goods Inventory		358,200	(balancing figure)
Raw material Inv.		130,000	(Cost of goods Manufactured)
Manufacturing Wages		154,000
Manufacturing Overheads		84,700
Balance		20,100
FINISHED GOODS INVENTORY
Balance		64,000	Cost of Goods sold		388,700
Work in Process Inventory		358,200	(Cost of goods sold)
Balance		33,500
Cost of Raw material used			130000
Cost of direct labor used			154000
Cost of goods manufactured:			358200
Cost of goods sold			388700
under-applied Overheads			73800