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			$	58,000
Work in process		10,800				22,500
Finished goods		66,000				41,600
Activities and information for May
Raw materials purchases (paid with cash)						216,000
Factory payroll (paid with cash)						357,000
Factory overhead
Indirect materials						21,000
Indirect labor						86,000
Other overhead costs						126,000
Sales (received in cash)						1,460,000
Predetermined overhead rate based on direct labor cost						75	%

Determine whether there is over or underapplied overhead.

Factory Overhead
Indirect materials
Indirect labor
Other overhead costs

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

Journal entry worksheet

• Record entry to allocate (close) underapplied/overapplied overhead to cost of goods sold.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1	Cost of goods sold
	Factory overhead