Saved Required information The following information applies to the questions di

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Saved Required information The following information applies to the questions displayed below Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Rav materials 50,500 Work in process 25,000 Finished goods 38,100 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate of $11.75 per direct labor-hour was based on a cost formula that estimated $470,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year a. Raw materials were purchased on account, $592,000. b. Raw materials use in production, $557,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $420,000: indirect labor, $150,000; selling and administrative salaries, $295,000. d. Incurred various selling and administrative expenses (e.g, advertising, sales travel costs, and finished goods warehousing), $381,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $320,000. f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year g. Jobs costing $1,399,450 to manufacture according to their job cost sheets were completed during the year h. Jobs were sold on account to customers during the year for a total of $2,925,000. The jobs cost $1,409,450 to manufacture according to their job cost sheets Required

Explanation / Answer

2 What is the Ending balance of raw materials Raw materials A/c particulars Amount particulars Amount beginning balance 50500 Purchases 592000 by issued for Production 557000 by Ending Balance 85500 Total 642500 Total 642500 3 Journal Entry to Record the labour costs incurred During the year Debit Credit Work in process A/c 420000 manufacturing Over head A/c 150000 Selling & Admin Salaries A/c 295000               To Wages payable A/c 865000 (being labour costs Incurred has been Recorded) 4 Total Amount of manufacturing Over head applied to Production During the year Pre Determined Overhead rate per direct labour Hour is $11.75 Total Direct labour Hours Worked is 41000 hrs manufacturing overhead Applied to production =$11.75*41000 =$481750 5 Total manufacturing Cost added to Work in process A/c Amount in $ raw materials used as Direct raw materials 557000 Direct labour incurred 420000 manufacturing overhead           Indirect labour 150000           Deprecaition , Insurance and Utilities 320000 Total 1447000

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