Question
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the companys inventory balances were as follows: Raw materials $ 79,000 Work in
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the companys inventory balances were as follows:
Raw materials | $ 79,000 |
---|---|
Work in process | $ 25,600 |
Finished goods | $ 37,200 |
The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the companys predetermined overhead rate of $12.25 per direct labor-hour was based on a cost formula that estimated $490,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:
Raw materials were purchased on account, $690,000.
Raw materials used in production, $660,000. All of of the raw materials were used as direct materials.
The following costs were accrued for employee services: direct labor, $440,000; indirect labor, $150,000; selling and administrative salaries, $260,000.
Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $462,000.
Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $340,000.
Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
Jobs costing $1,542,950 to manufacture according to their job cost sheets were completed during the year.
Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost $1,552,950 to manufacture according to their job cost sheets.
1. What is the journal entry to record raw materials used in production?
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