Question

In: Accounting

The following information applies to the questions displayed below.] The following information is available for Lock-Tite...

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 $ 28,000 $ 60,000 Work in process 9,500 20,900 Finished goods 50,000 34,300 Activities and information for May Raw materials purchases (paid with cash) 176,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 11,000 Indirect labor 46,000 Other overhead costs 100,500 Sales (received in cash) 1,400,000 Predetermined overhead rate based on direct labor cost 55 % 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.

Solutions

Expert Solution

GIVEN:

April 30 May 31
  Inventories       (in $)
     Raw materials 28000 60000
     Work in process 9500 20900
     Finished goods 50000 34300
  Activities and information for May
     Raw materials purchases (paid with cash) 176000
     Factory payroll (paid with cash) 200000
     Factory overhead
        Indirect materials 11000
        Indirect labor 46000
        Other overhead costs 100500
     Sales (received in cash) 1,400,000
     Predetermined overhead rate based on direct labor cost 55 %

EXPLANATION:

  1. Cost of direct materials used
   Beginning raw materials inventory $ 28000
   Plus purchases 176000
   Raw materials available 204000
   Less ending raw materials inventory (60000)
   Total raw materials used 144000
   Less indirect materials used (11000)
   Cost of direct materials used $ 133000
  2. Cost of direct labor used
   Total factory payroll $ 2000000
   Less indirect labor (46000)
   Cost of direct labor used $ 154000
  3. Cost of goods manufactured
   Beginning work in process inventory $ 9500
   Plus direct materials 133000
   Plus direct labor 154000
   Plus overhead applied
  (55% of direct labor cost)
,84700
   Total cost of work in process 381200
   Less ending work in process inventory (20900)
   Cost of goods manufactured $ 360300
  4. Cost of goods sold
   Beginning finished goods inventory $ 50000
   Plus cost of goods manufactured 360300
   Less ending finished goods inventory (34300)
  Cost of goods sold $ 376000
  5. Gross profit
   Sales $ 1,400,000
   Cost of goods sold (376000)
   Gross profit $ 1024000
  6. Actual overhead incurred
   Indirect materials $ 11000
   Indirect labor 46000
   Other overhead costs 100500
   Total actual overhead incurred 157500
   Overhead applied 84700
  Underapplied overhead $ 72800

Related Solutions

The following information applies to the questions displayed below.] The following information is available for Lock-Tite...
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 $ 50,000 $ 38,000 Work in process 9,200 18,500 Finished goods 59,000 34,300 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 100,000 Factory overhead Indirect materials 17,000 Indirect labor 23,000 Other overhead costs 106,000 Sales...
[The following information applies to the questions displayed below.] The following information is available for Lock-Tite...
[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 $ 26,000 $ 56,000 Work in process 9,700 20,700 Finished goods 62,000 33,500 Activities and information for May Raw materials purchases (paid with cash) 192,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 15,000 Indirect labor 57,500 Other overhead costs 115,500 Sales...
[The following information applies to the questions displayed below.] The following information is available to reconcile...
[The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2016. On July 31, the company’s Cash account has a $24,752 debit balance, but its July bank statement shows a $26,583 cash balance. Check No. 3031 for $1,320 and Check No. 3040 for $652 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with...
The following information applies to the questions displayed below.] The following information is available to reconcile...
The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.    On July 31, the company’s Cash account has a $25,418 debit balance, but its July bank statement shows a $26,578 cash balance. Check No. 3031 for $1,030, Check No. 3065 for $291, and Check No. 3069 for $1,798 are outstanding checks as of July 31. Check No....
[The following information applies to the questions displayed below.] The following information is available to reconcile...
[The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017. On July 31, the company’s Cash account has a $25,754 debit balance, but its July bank statement shows a $27,263 cash balance. Check No. 3031 for $1,190 and Check No. 3040 for $587 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with...
Required information [The following information applies to the questions displayed below.] The following information is available...
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 $ 28,000 $ 52,000 Work in process 9,000 21,000 Finished goods 61,000 33,300 Activities and information for May Raw materials purchases (paid with cash) 181,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 10,000 Indirect labor 46,000 Other overhead costs...
quired information [The following information applies to the questions displayed below.] The following information is available...
quired information [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.    On July 31, the company’s Cash account has a $25,180 debit balance, but its July bank statement shows a $27,263 cash balance. Check No. 3031 for $1,400, Check No. 3065 for $476, and Check No. 3069 for $2,168 are outstanding checks as of July 31....
Required information [The following information applies to the questions displayed below.] The following information is available...
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 $ 46,000 $ 55,000 Work in process 9,000 19,600 Finished goods 62,000 33,300 Activities and information for May Raw materials purchases (paid with cash) 183,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 11,000 Indirect labor 57,500 Other overhead costs...
Required information [The following information applies to the questions displayed below.] The following information is available...
Required information [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.    On July 31, the company’s Cash account has a $25,752 debit balance, but its July bank statement shows a $27,446 cash balance. Check No. 3031 for $1,260 and Check No. 3040 for $622 were outstanding on the June 30 bank reconciliation. Check No. 3040...
Required information [The following information applies to the questions displayed below.] The following information is available...
Required information [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.    On July 31, the company’s Cash account has a $24,754 debit balance, but its July bank statement shows a $26,063 cash balance. Check No. 3031 for $1,110 and Check No. 3040 for $547 were outstanding on the June 30 bank reconciliation. Check No. 3040...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT