Question

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: $50,500 Raw materials Work in process Finished goods $25,000 $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 used 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.

Answer 1

Req 1.
Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
b.	Work in process Inventory		5,57,000
	Raw material Inventory			5,57,000
	(for material used)
Req 2.
RAW MATERIAL INVENTORY
Beginning balance	50,500	5,57,000	Work in process inventory
Accounts payable	5,92,000
Ending balance	85,500
Req 3.
Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
c.	Work in process inventory		4,20,000
	Manufacturing Overheads		1,50,000
	Selling administrative expenses		2,95,000
	Wages Payable				8,65,000
	(for wages accrued)
Req 4
Actual DLH used in production			41,000
Multiply: Overheads rate per DLH			11.75
Manufacturing Overheads applied		4,81,750