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 Rav materials 637,000 9,100 $ $1,000 work in process Finished goods 20,300 65,000 34,500 Activities and information for May 177,000 Rav materiale purchases (paid with cash) Factory payroll (paid with cash) Factory overhead 200,000 12,000 Indirect materials Indirect labor 46,000 Other overhead costs 103,500 Sales (received in cash) 1,900,000 Predetermined overhead rate based on direct labor cost Exercise 15-7 Cost flows in a job order costing system LO P1, P2, P3, P4 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
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.
April 30
May 31
Inventories
Rav materials
Work in process
$37,000
9,100
65,000
51,000
20,300
34,500
Finished goods
Activities and information for May
Rav materiale purchases (paid with cash)
Factory payroll (paid with cash)
177,000
200,000
Factory overhead
12,000
Indirect materials
Indirect labor
46,000
Other overhead costs
103,500
Sales (received in cash)
1,900,000
Predetermined overhead rate based on direct labor cost
554
Exercise 15-7 Cost flows in a job order costing system LO P1, P2, P3, P4
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.
Raw Materials (RM)
37,000
April 30
12,000 indirect materials
RM purchases
177,000
DM used
April 30
DM used
$
Work in Process (WIP)
9,100
Cost of goods manu](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50b6afa2-b780-4729-b5ef-4c5f15273615%2F61f38343-61fd-481f-8b61-0c7555547f6d%2F2a4jm6_processed.jpeg&w=3840&q=75)
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