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 $ $44,000 9,200 63,000 55,000 19,500 34,300 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 173,000 300,000 9,000 69,000 103,000 1,400,000 55% 1. Incurred other overhead costs (record credit to Other Accounts). 2. Application of overhead to work in process. Prepare journal entries for the above transactions for the month of May. View transaction list Journal entry worksheet 1 Record other factory overhead costs (excluding indirect materials and indirect labor). Record credit to Other Accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit

Answer 1

Solution:
Transaction	General Journal	Debit	Credit
1.	Factory overhead	103,000
	Others accounts		103,000
2.	Work in process inventory	127,050
	Factory overhead		127,050
Working Notes:
For 1.	Other overhead costs is transferred to Others account as asked in the question.
For 2.	Application of overhead to work in process , so first of all we have to calculate Cost of direct labor used and use the predetermined overhead rate based on direct labor cost to get Factory Overhead to be transferred to Work in process inventory.
	Cost of direct labor used
	Total factory payroll	300,000	A
	Less indirect labor	69,000	B
	Cost of direct labor used	231,000	C=A-B
	Factory overhead
	= Predetermined overhead rate based on direct labor cost   x Cost of direct labor used
	=55%   x 231,000
	=$127,050
Please feel free to ask if anything about above solution in comment section of the question.