The following information is available for Lock-Tite Company, which produces spe

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 Inventories $48,000 11,200 68,000 62,000 23,300 45,600 Raw materials ork in proce Finished goods w ss Activities and information for May Raw materials purchases (paid with cash) Factory payrol1 (paid with cash) Factory overhead 220,000 365,000 Indirect materials Indirect labor Other overhead costs 25,000 90,000 130,000 1,500,000 Sales (received in cash) Predetermined overhead rate based on direct labor cost 80% Determine whether there is over or underapplied overhead Factory Overhead Actual overhead Applied overhead Underapplied overhead

Explanation / Answer

Working Note

Actual Overhead $245,000 Applied Overhead $220,000 Under applied Overhead $25,000

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