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 $38,000 9,400 66,000 38,000 19,700 34,200 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 186,000 100,000 14,000 23,000 110,500 1,700,000 55% Exercise 15-7 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.

Answer 1

Raw Materials					Work in process
RM - April 30	$             38,000	$       14,000	Indirect materials		WIP - April 30	$           9,400	$     2,81,050	Cost of goods manufactured
RM Purchases	$         1,86,000	$   1,72,000	DM used		DM used	$     1,72,000
					DL used	$         77,000
					Overhead applied	$         42,350
RM - May 31	$             38,000				WIP - May 30	$         19,700
Finished Goods					Factory overhead
FG - April 30	$             66,000	$   3,12,850	Cost of Goods Sold		Indirect material	$         14,000	$        42,350	Overhead applied
Cost of goods manufactured	$         2,81,050				Indirect labor	$         23,000
					Other overhead cost	$     1,10,500
Finished goods - May 31	$             34,200				Balance	$     1,05,150
Income statement					Factory Payroll
Sales	$       17,00,000				Factory Payroll	$     1,00,000	$        23,000	Indirect labor
Less: Cost of goods sold	$        -3,12,850						$        77,000	DL used
Gross Profit	$       13,87,150