Required information The following information applies to the questions displaye

Question

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 job order costing system Inventories Raw materials Work in process Finished goods $47,800 42,000 19,280 34,900 9,200 52,000 Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead 178,800 300,000 Indirect materials Indirect labor Other overhead costs 15,000 69,000 92,500 1,300,000 Sales (received in cash) Predetermined overhead rate based on direct labor cost 55%

Explanation / Answer

1. Raw Material A/c (Inventory) dr 178000

to Cash A/c 178000

2. Work-In-Progress A/c dr 183000*

to Raw Material A/c 183000

*[Opening + Purchase - Closing] = [47000 + 178000 - 42000] Wo

3. Manufacturing/ Factory Overhead A/c dr 15000

to Indirect Material 15000

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