The following information is available for Lock-Tite Company, which produces spe
ID: 2337521 • Letter: T
Question
The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.
1. Raw materials purchases for cash.
2. Direct materials usage.
3. Indirect materials usage.
4. Incurred other overhead costs (record credit to Other Accounts).
5. Application of overhead to work in process.
Prepare journal entries for the above transactions for the month of May.
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 %1. Raw materials purchases for cash.
2. Direct materials usage.
3. Indirect materials usage.
4. Incurred other overhead costs (record credit to Other Accounts).
5. Application of overhead to work in process.
Prepare journal entries for the above transactions for the month of May.
Explanation / Answer
1 Raw materials inventory 210000 Cash 210000 2 Work in Process inventory 186000 =43000+210000-52000-15000 Raw materials inventory 186000 3 Factory overhead 15000 Raw materials inventory 15000 4 Factory overhead 120000 Other accounts 120000 5 Work in Process inventory 185500 =(345000-80000)*70% Factory overhead 185500
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