Question

The following information is available for the Lock-Tite Company, which produces special-order security products and uses a job-order costing system.April 30 May 31Inventories Raw materials $ 43,000 $ 43,000 Work in process 9,300 20,900 Finished goods 53,000 33,100Activities and information for May Raw materials purchases (paid with cash) 188,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 12,000 Indirect labor 57,500 Other overhead costs 92,500 Sales (received in cash) 1,600,000 Predetermined overhead rate based on direct labor cost 55%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 manufactured4. Cost of goods sold*5. Gross profit.6. Overapplied or underapplied overhead.

Answer 1

Answer:

1. $176,000

2. $192,500

Explanation:

1. Cost of direct materials used = $ 43,000 + $ 188,000 - $ 43,000 = $ 188,000 - $ 12,000 = $176,000

2. Cost of direct labor used = $ 250,000 - $57,500 = $192,500