Question

equired information [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 $ 29,000 $ 38,000 Work in process 9,600 18,800 Finished goods 65,000 33,600 Activities and information for May Raw materials purchases (paid with cash) 190,000 Factory payroll (paid with cash) 300,000 Factory overhead Indirect materials 17,000 Indirect labor 69,000 Other overhead costs 97,500 Sales (received in cash) 1,700,000 Predetermined overhead rate based on direct labor cost 55 % Direct labor usage. Indirect labor usage. Total payroll paid in cash. Prepare journal entries for the above transactions for the month of May.

Answer 1

Transaction General Journal Credit Debit $ 231,000 ($300,000 - $69,000) Work in progress inventory Factory payroll $ 231,000 $69,000 (Factory wages payable) Factory Overhead Factory payroll (Factory payrolt payable) $69,000 Wages $300,000 Factory payroll (Factory wages payable) Cash $300,000 Direct labour = = = Total Payroll - $ 300,000 - $ 231,000/ Indirect labor $69,000

Direct Labour = $231,000