Bonita Wings, Inc. manufactures airplanes for use in stunt shows. Bonitas factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has different features (such as its shape, weight, and color), Bonita uses a job order costing system to accumulate product costs. At the end of 2020, Bonitas accountants developed the following expectations for 2021 based on the marketing departments sales forecast:

Budgeted overhead cost		$1,050,000
Estimated machine hours		50,000
Estimated direct labor hours		8,000
Estimated direct materials cost		$1,500,000

Bonitas inventory count, completed on December 31, 2020, revealed the following ending inventory balances:

Raw Materials Inventory		$251,000
Work in Process Inventory		$625,000
Finished Goods Inventory		$2,180,000

The companys 2021 payroll data revealed the following actual payroll costs for the year:

Job Title		Number Employed		Wage Rate per Hour		Annual Salary per Employee		Total Hours Worked per Employee
President and CEO		1				$224,000
Vice president and CFO		1				$178,000
Factory manager		1				$40,600
Assistant factory manager		1				$33,500
Machine operator		5		$15				2,250
Security guard, factory		2				$20,400
Forklift operator		2		$8				2,000
Corporate secretary		1				$36,400
Janitor, factory		2		$6				2,150

The following information was taken from Bonitas Schedule of Plant Assets. All assets are depreciated using the straight-line method.

Plant Asset		Purchase Price		Salvage Value		Useful Life
Factory building		$4,000,000		$150,000		20 Years
Administrative office		$650,000		$125,000		30 Years
Factory equipment		$2,000,000		$20,000		12 Years

Other miscellaneous costs for 2020 all paid in cash included:

Cost		Amount
Factory insurance (fully expired)		$12,000
Administrative office utilities		$5,500
Factory utilities		$30,000
Office supplies (fully consumed)		$5,200

Additional information about Bonitas operations in 2020 includes the following:

	Raw materials purchases for the year amounted to $1,946,000. All materials were purchased on account.
	The company used $1,860,000 in raw materials during the year. Of that amount, 85% was direct materials and 15% was indirect materials.
	Bonita applied overhead to Work in Process Inventory based on direct materials cost.
	Airplanes costing $3,450,000 to manufacture were completed and transferred out of Work in Process Inventory.
	Bonita uses a markup of 150% to price its airplanes. Sales for the year were $6,570,000. All sales are made on account. (Note: This transaction requires two journal entries.)

What was Bonitas predetermined overhead rate in 2021?

Predetermined overhead rate

70%

Job 3827 was started and completed in 2021. The job required 500 machine hours, 1,100 direct labor hours, and $76,000 in direct materials to complete. What was the total cost of this job? Using Bonitas 150% markup, what sales price would be charged for this airplane? (Round answers to 0 decimal places, e.g. 5,275.)

Prepare the journal entries to record Bonita's costs for 2020. (Use Salaries Payable and Wages Payable accounts for payroll costs.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Post entries in order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.) No. Account Titles and Explanation Debit Credit 1. Salaries and Wages Expense 438400 Salaries Payable 438400 (To record salaries for president, vice president, and corpoarte secretary) 2. Manufacturing Overhead 114900 Salaries Payable 114900 (To record salaried factory worker costs) 3. Work in Process Inventory 168750 Manufacturing Overhead 57800 Wages Payable 226550 (To record hourly factory worker costs) 4. Depreciation Expense 17500 Accumulated Depreciation 17500 (To record depreciation on administrative office equipment) 5. Manufacturing Overhead 357500 Accumulated Depreciation 357500 (To record depreciation on factory building and equipment) 6. Utilities Expense 5500 Supplies Expense 5200 cash 10700 (To record administrative office utilities and office supplies expense) 7. Manufacturing Overhead 42000 Cash 42000 (To record factory insurance and factory utilities) 8. Raw Materials Inventory 1946000 Accounts Payable 1946000 (To record raw materials purchases) 9. Work in Process Inventory 1581000 Manufacturing Overhead 279000 Raw Materials Inventory 1860000 10. Work in Process Inventory 1106700 Manufacturing Overhead 1106700 (To apply overhead to work in process) 11. Finished Goods Inventory 3450000 Work in Process Inventory 3450000 (To record transfer of completed airplanes) 12. Accounts Receivable 6570000 Sales Revenue 6570000 (To record sale of airplanes to customers) 13. Cost of Goods Sold 1,578,000 Finished Goods Inventory 1,578,000 (To record cost of airplanes sold) Prepare the appropriate T-accounts for Raw Materials Inventory, Work-in-Process Inventory, Finished Goods Inventory, Manufacturing Overhead Control, Cost of Goods Sold, and Sales, and record Bonita's transactions for 2021. (Post entries in order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.) Raw Materials Bal. 251,000 (8) 1,946,000 (9) 1,860,000 Bal. 337,000 Work in Process Inventory Bal. 625,000 (3) 168,750 (11) 3,450,000 (9) 1,581,000 (10) V 1,106,700 Bal. 31,450 Finished Goods Inventory Bal. 2,180,000 (11) v 3,450,000 (13) 2,628,000 Finished Goods Inventory Bal. 2,180,000 (11) 3,450,000 (13) 2,628,000 Bal. 114,900 (10) v 1,106,700 (3) 57,800 357,500 (9) 279,000 > 114,900 (10) v 1,106,700 (3) 57,800 357,500 (9) 279,000 >