Refer to information in Exercise 19-7. Prepare the journal entry to allocate (close) overapplied…

 
   

Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadlines.  

Refer to information in Exercise 19-7. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.

Exercise 19-7

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

April 30                                                May 31

Inventories

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $40,000                                                $ 50,000

Goods in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9,600                                                     19,500

Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    60,000                                                  33,200

Activities and information for May

Raw materials purchases (paid with cash) . . . . . . . . . .                                                                      189,000

Factory payroll (paid with cash) . . . . . . . . . . . . . . . . . . .                                                                     400,000

Factory overhead

Indirect materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                    12,000

Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   75,000

Other overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                   100,500

Sales (received in cash) . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                  1,200,000

Predetermined overhead rate based on direct labor cost . . . . . . . . . .                                        65%

Compute the following amounts for the month of May.

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.