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 $ 46,000 $ 58,000
work in process 10,800 22,500
finished goods 66,000 41,600
activities and information for may
raw materials purchases (paid with cash) 216,000
factory payroll (paid with cash) 357,000
factory overhead
indirect materials 21,000
indirect labor 86,000
other overhead costs 126,000
sales (received in cash) 1,460,000
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 or underapplied overhead to cost of goods sold.