Homework SourseRequired information The following information applies to th
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 Part 1 of 4 job order costing system. 375 points entories Raw saterials Mork in process Piniahed goods 32,000 47,000 1, 000 34,000 Activities and infornat ien for May Rav naterials parebases (paid with eash) Factory payroll (paid with cash) Factory overhead 194.000 300,000 12,000 69.000 102,000 1,80.00 Indirect naterials Indireet 1abor Sales (received in cash) Predeternined overhead rate based on direet labor cost Compute the following amounts for the month of May using T-accounts 1. Cost of direct materials used . Cost of direct labor used 3. Cost of goods manufactured Cost of goods sold.\" . Gross profit s. Overapplied or underapplied overhead Do not consider any underapplied or overapplied overhead 
Solution
a Cost of Direct Materials used opening stock + purchases -closing stock =32000+194000-47000 =$179,000 b Cost of Direct labour used $300,000 c. Cost of Goods Manufactured opening stock rawmaterials $ 32,000 work in progress $ 9,300 finished goods $ 51,000 add Purchases of raw materials $ 194,000 add Factory payroll $ 300,000 less Closing stock rawmaterials $ 47,000 work in progress $ 18,700 finished goods $ 34,000 cost of goods manufactured $ 486,600 d Cost of goods sold Cost of goods manufactured $ 486,600 add Factory Overhead Indirect materials $ 12,000 Indirect labour $ 69,000 other Overhead costs $ 102,000 Cost of goods sold $ 669,600 e gross profit sales $ 1,800,000 less Cost of goods sold $ 669,600 gross profit $ 1,130,400 f allocated overhead costs =12000+69000+102000 =$183000 direct labour cost =$300000 overhead rate applied 61%(183000*100/300000) over applied because 61% >51%