Bunnell Corporation is a manufacturer that uses as follows job-order costing On

Question

Bunnell Corporation is a manufacturer that uses as follows job-order costing On January 1, the company's inventory balances wer Rau materials63,S00 Work in process 32,000 Finiabed goods $36,000 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 $13.00 per direct labor-hour was based on a cost formula that estimated $520,000 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, $584,000 b. Raw materials use in production, $537600 All of of the raw materials were used as direct materials c The following costs were accrued for employee services: direct labor, $470,000, indirect labor, $150,000, selling and administrative salaries, $249.000 warehousing). $464,000 t Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all d. Incurred various selling and administrative expenses (eg, advertising, sales travel costs, and finished goods e Incurred various manufacturing overhead costs (e g. depreciation, insurance, and utilities), $370,000 jobs during the year a. Jobs costing $1478.700 to manufacture according to their job cost sheets were comoleted during the vear you want to clean it up fer a fresh, lie-new wekome bad expenience? And by the wsy

Explanation / Answer

Solution 8:

Total acutal manufacturing overhead cost = Indirect labor + Other manufacturing overhead

= $150,000 + $370,000 = $520,000

Solution 9:

Manufacturing overhead applied = Actual direct labor hour * Predetermined overhead rate

= 41000 * $13 = $533,000

Overapplied overhead = $533,000 - $520,000 = $13,000

Solution 10:

Cost of goods available for sale = Beginning finished goods inventory + Cost of goods manufactured

= $36,000 + $1,478,700 = $1,514,700

Solution 11:

Solution 12:

Ending finished goods inventory = $26,000

Journal Entries Transaction Particulars Debit Credit 1 Cost of goods sold Dr $1,488,700.00          To Finished goods inventory $1,488,700.00 (To record COGS)

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