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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			$	56,000
Work in process		9,500				20,600
Finished goods		63,000				34,500
Activities and information for May
Raw materials purchases (paid with cash)						172,000
Factory payroll (paid with cash)						150,000
Factory overhead
Indirect materials						10,000
Indirect labor						34,500
Other overhead costs						114,500
Sales (received in cash)						1,700,000
Predetermined overhead rate based on direct labor cost						55	%

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.

Answer 1

Raw Material Inventory
Raw material, April 30	$29,000
Purchases	172,000	$135,000	Direct material used
		10,000	Indirect aterial
Raw material, May 31	$56,000
Factory Payroll
Factory payroll	$150,000	115,500	Direct labor used
		34,500	Indirect labor
Factory Overhead
Indirect material	$10,000
Indirect labor	34,500	$63,525	Overhead applied
Other overhead	114,500
Underapplied overhead	$95,475
Work In Process Inventory
Work in process, April 30	$9,500
Direct material	135,000	$302,925	Cost of goods manufactured
Direct labor	115,500
Overhead applied	63,525
Work in process, May 31	$20,600
Finished Goods Inventory
Finished Goods, April 30	$63,000
Cost of goods manufactured	302,925	$331,425	Cost of goods sold
Finished Goods, May 31	$34,500

Income Statement
Sales	$1,700,000
Less: Cost of goods sold	331,425
Gross profit	$1,368,575