## Cost Accounting and Job Order Costing: An Example from Lock-Tite Company### 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 (as of April 30 and May 31):- Raw materials: - April 30: $29,000 - May 31: $38,000- Work in process: - April 30: $19,600 - May 31: $20,700- Finished goods: - April 30: $1,000 - May 31: $35,000#### Activities and Information for May:- Raw materials purchases (paid with cash): $180,000- Factory payroll (paid with cash): $150,000- Factory overhead: - Indirect materials: $15,000 - Indirect labor: $34,500 - Other overhead costs: $199,000- Sales (received in cash): $1,600,000- Predetermined overhead rate based on direct labor cost: 55%---#### Questions and Requirements:1. Direct labor usage.2. Indirect labor usage.3. Total payroll paid in cash.Prepare journal entries for the above transactions for the month of May.[View transaction list]### Journal Entry Worksheet:(A) (B) (C)---### Diagram Explanation:In the provided information, there is no graph or diagram present. The table gives a detailed view of inventory balances at the end of April and May, as well as various financial activities pertinent to the company's manufacturing process during May. This structured data helps in analyzing the company's costing system and assists in making accurate journal entries for accounting purposes. For educational purposes, this exercise demonstrates how to manage and document transactions within a job order costing system.For students, a thorough understanding of this example will aid in grasping the complexities involved in managing raw materials, work in process, and finished goods inventories, along with handling factory payrolls and overhead costs. The knowledge of predetermined overhead rates is crucial for accurately estimating and allocating costs. # Journal Entries for Labour Usage and Payroll### Instructions:You need to prepare journal entries for the following transactions for the month of May:1. Direct labor usage.2. Indirect labor usage.3. Total payroll paid in cash.To proceed, let's start by recording the journal entries step-by-step for each of the transactions.---### Procedural Steps:**1. Direct Labor Usage:** - Record the entry for direct labor usage. - Note: Enter debits before credits.Below the instructions, there is a **Journal entry worksheet** table with the following headers:- **Transaction**- **General Journal**- **Debit**- **Credit**### Diagram Details:- The worksheet contains seven rows: one for transaction labels and six for entering specific details of transactions.- There are three main columns within the worksheet: 1. **Transaction:** (where you can number each transaction) 2. **General Journal:** (where you can enter the account names) 3. **Debit:** (where you can enter debit amounts) 4. **Credit:** (where you can enter credit amounts)Additionally, this is accompanied by three buttons at the bottom of the worksheet:- **Record entry:** (to record the entries made in the worksheet)- **Clear entry:** (to clear the entries in the worksheet)- **View general journal:** (to view the general journal containing all recorded entries)### Note:This practical exercise helps in understanding how to journalize labor expenses in the accounting records.---This tutorial aims to provide clarity on the process of preparing and recording necessary accounting entries for labor-related transactions in a professional setting.

Name: ## Cost Accounting and Job Order Costing: An Example from Lock-Tite C
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Description: ## Cost Accounting and Job Order Costing: An Example from Lock-Tite Company### Required Information*The following information applies to the questions displayed below.*The following information is available for Lock-Tite Company, which produces spec

Payroll is the payment that a company is required to pay to its employees for a set period of time…

Business

Accounting

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. April 30 May 31 Inventories Raw materials Work in process $29,000 9,600 51,000 Finished goods Activities and information for May AVANT Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost $ 38,000 20,700 35,000 180,000 150,000 15,000 34,500 109,000 1,600,000 55%

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. April 30 May 31 Inventories Raw materials Work in process $29,000 9,600 51,000 Finished goods Activities and information for May AVANT Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost $ 38,000 20,700 35,000 180,000 150,000 15,000 34,500 109,000 1,600,000 55%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sandra Corporation uses a job-order costing system to assign manufacturing costs to jobs. At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold. Its balance sheet on January 1 appears below: Sandra Corporation Balance Sheet January 1 Assets: Cash $ 17,950 Raw materials $ 7,950 Work in process 11,950 Finished goods 16,950 36,850 Property, plant, and equipment (net) 218,950 Total assets $273,750 Liabilities and Stockholders' Equity: Retained earnings $273,750 Total liabilities and stockholders' equity $273,750 Summaries of the transactions completed during January appear below: (1) Raw materials purchased for cash $ 81,950 (2) Raw materials used in production (direct materials) $ 64,950 (3) Raw materials used in production (indirect materials) $ 10,475 (4) Direct labor paid in cash $ 77,950 (5) Indirect labor paid in cash $ 21,950 (6) Selling and administrative salaries paid in cash $ 39,950 (7) Factory utility costs paid in…
Verizox Company uses a job order cost system with manufacturing overhead applied to products based on direct labor hours. At the beginning of the most recent year, the company estimated its manufacturing overhead cost at $188,870. Estimated direct labor cost was $456,280 for 18,700 hours. Actual costs for the most recent month are summarized here: Item Description Direct labor (1,500 hours) Indirect costs Indirect labor Indirect materials. Factory rent Factory supervision Factory depreciation Factory janitorial work Factory insurance General and administrative salaries Selling expenses 3. Calculate actual manufacturing overhead costs. 4. Compute over- or underapplied overhead. Required: 1. Calculate the predetermined overhead rate. 2. Calculate the amount of applied manufacturing overhead. 89 Complete this question by entering your answers in the tabs below. SEP Total Cost $ 45,629 84 2,570 3,460 3,240 4,760 5,680 1,230 1,830 4,260 5,380 TAO O
The following information is available for ADT Company, which produces special-order security products and uses a job order costing system. Overhead is applied using a predetermined overhead rate of 55% of direct labor cost. Inventories Raw materials Work in process Finished goods
Entries for Costs in a Job Order Cost System Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: a. Materials purchased on account, $770,000. b. Materials requisitioned, $680,000, of which $75,800 was for general factory use. c. Factory labor used, $756,000, of which $182,000 was indirect. d. Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600. e. Prepaid expenses expired for factory overhead were $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660. f. Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900. g. Factory overhead costs applied to jobs, $568,500. h. Jobs completed, $1,500,000. i. Cost of goods sold, $1,375,000. Required: Journalize the entries to record the summarized operations. If an amount box does not require an entry, leave it…
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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. April 30 May 31 Inventories Raw materials $ 50,000 Work in process $49,000 9,600 64,000 18,300 Finished goods 34,800 Activities and information for May Raw materials purchases (paid with cash) 173,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 11,000 Indirect labor 46,000 Other overhead costs 105,000 Sales (received in cash) Predetermined overhead rate based on direct labor cost 1,700,000 55% 1. Incurred other overhead costs (record credit to Other Accounts). 2. Applied overhead to work in process. Prepare journal entries for the above transactions for the month of May. *********** *********** OI of 7 H ……. ‒‒‒ G
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Required information [The following information applies to the questions displayed below.] Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materials Work in process Finished goods $ 40,000 $ 18,000 $ 35,000 The company applies overhead cost to jobs using direct labor-hours. For this year, the company's predetermined overhead rate of $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded this year: a. Raw materials were purchased on account, $510,000. b. Raw materials used in production, $480,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and administrative salaries, $240,000. d. Incurred various selling and…
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work 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. April 30 May 31 Inventories Raw materials Work in process $ 29,000 9,600 51,000 Finished goods Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost 1. Incurred other overhead costs (record credit to Other Accounts). 2. Applied overhead to work in process. Prepare journal entries for the above transactions for the month of May. View transaction list Journal entry worksheet
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