Question

[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	$	40,000			$	50,000
Work in process		9,100				18,500
Finished goods		60,000				33,200
Activities and information for May
Raw materials purchases (paid with cash)						173,000
Factory payroll (paid with cash)						300,000
Factory overhead
Indirect materials						14,000
Indirect labor						69,000
Other overhead costs						96,000
Sales (received in cash)						1,900,000
Predetermined overhead rate based on direct labor cost						55	%

1. Raw materials purchases for cash.
2. Direct materials usage.
3. Indirect materials usage.

  
Prepare journal entries for the above transactions for the month of May.

Answer 1

Answer
	Beginning balance of material	$ 40,000
	Add: Purchases	$173,000
	Less: Indirect material used	-$ 14,000
	Less: Ending balance	-$ 50,000
	Direct material used for production	$149,000
Date	Title	Debit	Credit
	Raw material inventory	$173,000
	Cash		$173,000
	(To record purchase of raw material)
	Work in process inventory	$149,000
	Raw material inventory		$149,000
	(To record Direct material used )
	Manufacturing overhead	$ 14,000
	Raw material inventory		$ 14,000
	(To record indirect material used )