Bonita Wings, Inc. manufactures airplanes for use in stunt shows. Bonita's 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, Bonita's accountants developed the following expectations for 2021 based on the marketing department's sales forecast: Budgeted overhead cost Estimated machine hours Estimated direct labor hours Estimated direct materials cost $1,050.000 50,000 8,000 $1.500.000 Bonita's inventory count completed on December 31, 2020, revealed the following ending inventory balances: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $251.000 $625.000 $2.180,000 The company's 2021 payroll data revealed the following actual payroll costs for the year: Annual Total Hours Number Wage Rate Salary per Worked per Job Title Employed per Hour Employee 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 $20,400 Forklift operator $8 2,000 Corporate secretary 1 $36,400 Janitor, factory 2 $6 2.150 2 2 The following information was taken from Bonita's Schedule of Plant Assets. All assets are depreciated using the straight-line method The following information was taken from Bonita's Schedule of Plant Assets. All assets are depreciated using the straight-line method. Plant Asset Factory building Administrative office Factory equipment Purchase Price Salvage Value Useful Life $4,000,000 $150,000 20 Years $650.000 $125,000 30 Years $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 Bonita's 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 joumal entries.) What was Bonita's predetermined overhead rate in 2021? Predetermined overhead rate 70% of direct materials cost e Textbook and Media List of Accounts Attempts: 1 of 3 used (b) 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 decimal places, eg. 5.275.) Debit Credit No. Account Titles and Explanation 1 (To record salaries for president, vice president, and corpoarte secretary) 2 (To record salaried factory worker costs) Work in Process Inventory 3. (To record hourly factory worker costs) 4. (To record depreciation on administrative office equipment) 5. (To record depreciation on factory building and equipment) 6. (To record administrative office utilities and office supplies expense) 7 (To record factory insurance and factory utilities) 3. (To record raw materials purchases) 9. (To record direct materials and indirect materials used in production) 10. happy overed process 11. (To record transfer of completed airplanes) 12 (To record sale of airplanes to customers) 13 (To record cost of airplanes sold)
