Bunnell Corporation is a manufacturer that uses job-order costing On January 1,

Question

Bunnell Corporation is a manufacturer that uses job-order costing On January 1, the company's inventory balances were as follows Raw materials Work in process Finished goods$ 63,9e0e $ 86,500 22,600 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 $15.00 per direct labor- hour was based on a cost formula that estimated $600,000 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, $632.000 b. Raw materials use in production, $585,600. All of of the raw materials were used as c. The following costs were accrued for employee services: direct labor, $550.000: d. Incurred various selling and administrative expenses (e.g. advertising. sales travel e. Incurred various manufacturing overhead costs (e.g.. depreciation, insurance, and f. Manufacturing overhead cost was applied to production. The company actually g. Jobs costing $1.670,300 to manufacture according to their job cost sheets were h. Jobs were sold on account to customers during the year for a total of $3,172,500 direct materials. indirect labor, $150,000: selling and administrative salaries, $328.000. costs, and finished goods warehousing),. $375,000. utilities). $450.000. worked 41,000 direct labor-hours on all jobs during the year completed during the year The jobs cost $1,680,300 to manufacture according to their job cost sheets 2 What is the ending balance in Raw Materials? Raw Materials Beg. Bal. 40,000 End. Bal 40,000

Explanation / Answer

Raw materials Beg. Bal. 86500 Used 585600 Purchased 632000 Sub-total 718500 Sub-total 585600 End. Bal 132900 Total 718500 Total 718500 So the Ending Balance in Raw materials is = 132900

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