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 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 April 30 $ 28,000 9,600 64,000 $ May 31 34,000 19,300 33,300 190,000 150,000 17,000 34,500 118,000 1,800,000 55%
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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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
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
Compute the following amounts for the month of May using T-accounts.
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.
*Do not consider any underapplied or overapplied overhead.
April 30
$28,000
9,600
64,000
May 31
$ 34,000
19,300
33,300
190,000
150,000
17,000
34,500
118,000
1,800,000
55%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F69df46e6-b801-4cd9-b961-48857fd99249%2F51fa9d96-efee-4c5a-8d40-611540fbad45%2Fgy6jzd_processed.png&w=3840&q=75)
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