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Required 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$43,000  $52,000 Work in process 10,200   21,300 Finished goods 63,000   35,600 Activities and information for May       Raw materials purchases (paid with cash)     210,000 Factory payroll (paid with cash)     345,000 Factory overhead       Indirect materials     15,000 Indirect labor     80,000 Other overhead costs     120,000 Sales (received in cash)     1,400,000 Predetermined overhead rate based on direct labor cost     70%  Compute the following amounts for the month of May using T-accounts.Cost of direct materials used.Cost of direct labor used.Cost of goods manufactured.Cost of goods sold.*Gross profit.Overapplied or underapplied overhead.*Do not consider any underapplied or overapplied overhead.

Question

Required 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 $ 43,000     $ 52,000  
Work in process   10,200       21,300  
Finished goods   63,000       35,600  
Activities and information for May              
Raw materials purchases (paid with cash)           210,000  
Factory payroll (paid with cash)           345,000  
Factory overhead              
Indirect materials           15,000  
Indirect labor           80,000  
Other overhead costs           120,000  
Sales (received in cash)           1,400,000  
Predetermined overhead rate based on direct labor cost           70 %
 

 

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.
 

check_circleAnswer
Step 1

 

1.

Cost of direct materials: The cost of raw materials that are primarily used for the production of goods is referred to as cost of direct materials.

Compute cost of direct materials used for the month of May.

 

Hence, cost of direct materials used is $186,000.

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Step 2

2.

Cost of direct labor: The cost of labor that are involved in the production processes is referred to as cost of direct labor. The cost of labor included wages, compensation, taxes, and insurance costs.

Compute cost of direct labor used for the month of May.

Hence, cost of direct labor used is $265,000.

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Step 3

3.

Cost of goods manufactured: The total costs like direct materials cost, direct labor cost, factory overhead, work-in-process, incurred to produce or manufacture goods is referred to as cost of goods manufactured.

Compute cost of goods manufactured ...

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