Sunday 31 January 2016

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.

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.

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Explanation:


1. Raw materials purchases for cash.
2. Direct materials usage.
3. Indirect materials usage.

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


1. Direct labor usage.
2. Indirect labor usage.
3. Total payroll paid in cash.

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

9 comments:

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  4. Amada advertisers on November 30, 2021, received an order from Pleasant cosmetics for
    manufacturing and installation of a huge neon sign for a contract price of Rs.180000. Job no. A￾548 was allotted to the job. The costs are charged to the job periodically by means of weekly
    summaries. The following costs were related to the job A-548
    Title of costs Nov 12 Nov 17 Nov 23 Nov 30
    Direct materials
    costs
    13300 24800 16400 12600
    Direct labor
    costs
    1800 12400 20300 14200
    Factory overhead is applied on the basis of 25% of direct labor cost. The job was completed on
    Nov.30. Selling and administrative expenses are Rs.25000 and Rs.48000 respectively. If the profit
    markup is 20% on all cost find the product price?

    ReplyDelete
  5. Kindly tell the Answer of this question

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  6. Thank you so much, a lot of this I didn't really understand. This explanation is clear and concise. You're a godsend.

    ReplyDelete