Question

how do i calculate?

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 $ $46,500 10,900 66,500 59,000 22,700 42,600 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 217,000 359,000 22,000 87,000 127,000 1,470,000 70% Determine whether there is over or underapplied overhead. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Overhead Absorption General Journal Determine whether there is over or underapplied overhead. Indirect materials Applied overhead Factory Overhead 22,000 87,000 109,000 Indirect labor Other overhead costs Underapplied overhead

Answer 1

Applied overhead = Actual direct labor cost x Predetermined overhead rate

= 359,000 x 70%

= $251,300

Actual overhead = Indirect materials + Indirect labor + Other overhead costs

= 22,000+87,000+127,000

= $236,000

Over applied overhead = Applied overhead - Actual overhead

= 251,300-236,000

= $15,300

                                          Factory Overhead

Indirect materials	22,000	Applied overhead	251,300
Indirect labor	87,000
Other overhead costs	127,000
Over applied overhead	15,300

Journal

Factory Overhead	$15,300
Cost of goods sold		$15,300

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