Question

Required information 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 products and uses a job order costing system. April 30 May 31 Inventories Raw materials Work in procesS Finished goods $28,000 56,000 20,200 34,600 10,000 55,000 Activities and information for May Raw materials purchases (paid with cash) Factory payrol1 (paid with cash) Factory overhead 198,000 250,000 Indirect materials Indirect labor Other overhead costs 16,000 57,500 98,500 1,800,000 Sales (received in cash) Predetermined overhead rate based on direct labor cost 55% Exercise 19-7 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 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 0 Finished Goods (FG Factory Overhead 0 ncome statement (partial

An explanation as well please.

Answer 1

Raw material
Beg. Balance	28000	Direct material Used	154000
Purchased	198000	Indirect material	16000
	226000		170000
Ending balance	56000
Work in progress
Beg balance	10000
Direct material Used	154000
Labor	250000	Jobs completed	531300
Manufacturing overheads	137500
	551500		531300
Ending balance	20200
Finished goods inventory
Beg balance	55000	Cost of goods sold	551700
Completed jobs	531300
	586300		551700
Ending balance	34600

Income statement

Sales revenue 1800000

Less cost of goods sold 462575

Gross profit 1337425

Actual overehads
indirect material	16000
Incirect labor	57500
Overheads	98500
	172000
Overheads applied	137500
Under applied	34500