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: Raw materials Work in process Finished goods $ 84,500 $ 35,000 $ 44,100 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 $12.50 per direct labor-hour was based on a cost formula that estimated $500,000 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, $614,000. b. Raw materials used in production, $567,600. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $450,000; Indirect labor, $150,000; selling and administrative salaries. $290,000 d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing) $375,000. e. Incurred various manufacturing overhead costs (eg, depreciation, insurance, and utilities). $350,000 1. Manufacturing overhead cost was applied to production. The company actually worked 41.000 direct labor-hours on all jobs during the year. 9. Jobs costing $1,461,900 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 $3,172,500. The jobs cost $1,471,900 to manufacture according to their job cost sheets.

1. what is the journal entey to record raw materials used in production? (if no entry is required for a transaction/event, select "no journal entey required" in the first account field.)

2. What is the ending balance in Raw Materials?

3. What is the journal entry to record the labor costs incurred during the year?

4. What is the total amount of manufacturing overhead applied to production during the

year?

5. What is the total manufacturing cost added to Work in Process during the year?

6. What is the journal entry to record the transfer of completed jobs that is referred to in

item g above? (If no entry is required for a transaction/event, select "No journal entry

required" in the first account field.)

7. What is the ending balance in Work in Process?

8. What is the total amount of actual manufacturing overhead cost incurred during the

year?

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?

11. What is the journal entry to record the cost of goods sold referred to in item h

above? (If no entry is required for a transaction/event, select "No journal entry

required" in the first account field.)

12. What is the ending balance in Finished Goods?

13. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?

14. What is the gross margin for the year?

15. What is the net operating income for the year?

1. what is the journal entey to record raw materials used in production? (if no entry is required for a transaction/event, select "no journal entey required" in the first account field.)

2. What is the ending balance in Raw Materials?

3. What is the journal entry to record the labor costs incurred during the year?

4. What is the total amount of manufacturing overhead applied to production during the

year?

Answer 1

1)	Transaction	General Journal					Debit	Credit
	b.	Work in process inventory					567,600
		Raw materials inventory						567,600
2)	Ending balance in Raw Materials
	Raw materials
	Beg.bal	84,500
	a.	614,000	567,600	b.
	End bal	130,900
3)	Transaction	General Journal					Debit	Credit
	c.	Work in process inventory					450,000
		Manufacturing overhead					150,000
		Selling & administrative salaries					290,000
		Factory wages payable						890,000
4)	Manufacturing overhead applied			(41000*12.5)			512500	answer
5)	Total manufacturing cost added during the year
	Direct materials				567,600
	Direct labor				450,000
	overhead applied				512,500
	Total.				1,530,100
	total manufacturing cost				1,530,100	answer
6)	Transaction	General Journal					Debit	Credit
	g.	Finished goods inventory					1,461,900
		Work in process inventory						1,461,900
7)	Work in process
	Beg.bal	35,000	1,461,900	g.
	b.	567,600
	c.	450,000
	f.	512,500
	End bal	103,200
8)	total actual manufacturing overhead cost					500,000	answer
	indirect labor			150000
	Various manfuacturing cost			350,000
	total			500000
9)	overapplied overhead			12,500	answer
10)	Cost of goods available for sale				1,506,000	answer
	(44,100+1,461,900)
11)	Transaction	General Journal					Debit	Credit
	h.	cost of good sold					1,471,900
		Finished goods inventory						1,471,900
12)	Finished goods	Finished Goods
	Beg.bal	44,100
	g.	1,461,900	1,471,900	h.
	End bal	34,100
13)	Adjusted cost of goods sold				1,459,400
	(1,471,900-12,500)
14)	Gross margin				1,713,100
	(sales - adjusted cost of goods sold)
15)	Net operating income				1,048,100	answer
	Gross margin			1,713,100
	less
	Selling & adm salaries			-290,000
	Various selling & adm			-375,000
	Net operating income			1,048,100