Item3

10points

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Item 3

Item 3 10 points

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	$	48,500			$	63,000
Work in process		11,300				23,500
Finished goods		68,500				46,600
Activities and information for May
Raw materials purchases (paid with cash)						221,000
Factory payroll (paid with cash)						367,000
Factory overhead
Indirect materials						26,000
Indirect labor						91,000
Other overhead costs						131,000
Sales (received in cash)						1,510,000
Predetermined overhead rate based on direct labor cost						75	%

Determine whether there is over or underapplied overhead.

Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.