Use information in Exercise 19-7 to prepare journal entries for the following events for the…

 
   

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Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts).

2. Application of overhead to goods in process.

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.