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 70% of direct labor cost.
Required:
1. Set up a Raw Materials Inventory T-account and insert amounts for beginning and ending balances along with purchases and indirect materials used. Solve for direct materials used in the period.
2. Compute the cost of direct labor used for the period.
3. Set up a Work in Process Inventory T-account and insert amounts for beginning and ending balances along with direct materials used (from part 1), direct labor used (from part 2), and applied overhead. Solve for cost of goods manufactured in the period.
4. Set up a Finished Goods Inventory T-account and insert amounts for beginning and ending balances along with cost of goods manufactured (from part 3). Solve for cost of goods sold in the period (do not consider any under-or overapplied overhead).
5. Set up a Factory Overhead T-account and insert amounts for indirect materials used, indirect labor used, other overhead costs, and applied overhead. Solve for underapplied or overapplied overhead.
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