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						102,500
Sales (received in cash)						1,300,000
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.

Raw Materials (RM)					Work in Process (WIP)
	0					0
Finished Goods (FG)					Factory Overhead
	0
						0

Income statement (partial)
	$0

Raw materials purchases for cash.

Direct materials usage.

Indirect materials usage.

Prepare journal entries for the above transactions for the month of May. Journal entry worksheet

Record raw material purchases for cash.

Transaction	General Journal	Debit	Credit
1

Record the entry to assign direct materials to jobs.

Transaction	General Journal	Debit	Credit
2

Record the entry to assign indirect materials to jobs.

Transaction	General Journal	Debit	Credit
3

Direct labor usage.

Indirect labor usage.

Total payroll paid in cash.

Prepare journal entries for the above transactions for the month of May.

Record the entry for direct labor usage.

Transaction	General Journal	Debit	Credit
1

Record the entry for indirect labor usage.

Transaction	General Journal	Debit	Credit
2

Record the entry for the cash payment of total factory payroll.

Transaction	General Journal	Debit	Credit
3

Incurred other overhead costs (record credit to Other Accounts).

Application of overhead to work in process.

Prepare journal entries for the above transactions for the month of May.

Record other Factory overhead costs (excluding indirect materials and indirect labor). Record credit to Other Accounts.

Transaction	General Journal	Debit	Credit
1

Record the application of overhead to work in process.

Transaction	General Journal	Debit	Credit
2