Exercise 15-13 Adjusting factory overhead LO P4

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

	April 30				May 31
Inventories
Raw materials	$	43,500			$	53,000
Work in process		10,300				21,500
Finished goods		63,500				36,600
Activities and information for May
Raw materials purchases (paid with cash)						211,000
Factory payroll (paid with cash)						347,000
Factory overhead
Indirect materials						16,000
Indirect labor						81,000
Other overhead costs						121,000
Sales (received in cash)						1,410,000
Predetermined overhead rate based on direct labor cost						75	%

Determine whether there is over or underapplied overhead.
Prepare the journal entry to allocate (close) overapplied orunderapplied overhead to Cost of Goods Sold.

1. Materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid and assigned to Work in ProcessInventory.
4. Indirect labor paid and assigned to Factory Overhead.
5. Overhead costs applied to Work in Process Inventory.
6. Actual overhead costs incurred, including indirect materials.(Factory rent and utilities are paid in cash.)
7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
8. Cost of goods sold for Job 306.
9. Revenue from the sale of Job 306.
10. Assignment of any underapplied or overapplied overhead to theCost of Goods Sold account. (The amount is not material.)

2. Prepare journal entries for the month of Aprilto record the above transactions.