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 32,800 Finished Goods34,800 77,500 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 $12.75 Per Direct

 

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 $ 77,500 $ 32,800 Finished goods $ 34,800 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 $12.75 per direct labor-hour was based on a cost formula that estimated $510,000 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, $654,000. b. Raw materials use in production, $618,800. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $417,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $360,000. 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 $1,539,250 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 $1,549,250 to manufacture according to their job cost sheets.