The following information is available for Lock-Tite Company, which products and
ID: 2510812 • Letter: T
Question
The following information is available for Lock-Tite Company, which products and uses a job order costing system. 15-7 Cost fnlows in a job order costing system April 30May 31 1 P2 P3 P4 $43,000 5000 0.200 21,300 63.000 35,600 Inventories Work in process Activities and information for May Raw materials purchases (paid with cash)..... . . Factory payroll (paid with cash)... Factory overhead 210,000 5,000 80,000 120,000 1,400,000 Indirect labor Predetermined overhead rate based on direct labor cost . Compute the following amounts for the month of May 1. Cost of direct materials used. 4. Cost of goods sold.* overapplied overhead. 2. Cost of direct labor used. 3. Cost of goods manufactured. *Do not consider any underapplied or 5. Gross profit. 6. Overapplied or underapplied overhead. (3) $625,400 se 15-8 Use information .Explanation / Answer
Req 1. Direct materiall used: Beginning Inventory of RM 43000 Add: Purchasee 210000 Less: ending Inventory of RM -52000 Raw material consumed 201000 Less: Consumed as indirect material -15000 Direct material consumed 186000 Req 2: Cost of Direct labour used: Total Factory payroll paid: 345000 Lless: Indirect wages paid -80000 Direct labour cost 265000 Req 3: Cost of Goods Manufactured: Current Manufacturing Cost incurred: material 186000 labour 265000 OH (70% of $265000) 185500 Total manufacturing Cost 636500 Add: beginning Balance of WIP 10200 Less: Ending Inventory of WIP -21300 Cost of Goods Manufactured: 625400 Req 4: Cost of Goods sold: Cost of Goods mnaufactured: 625400 Add: beginning Balance of FG 63000 Less: ending Balance of FG -35600 Cost of Goods sold 652800 Req 5: Gross profit: Sales revenue 1,400,000 Lless: cost of Goods sold 652800 Gross profit: 747,200 Req 6: Under/Over-applied OH: Actual OH incurred (15000+80000+120000) 215000 Less: Actual Applied 185500 Under-applied overheads 29500
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