Question
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materials$77,500Work in process$32,800Finished goods$34,800 The
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows:
Raw materials$77,500Work in process$32,800Finished 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:
- Raw materials were purchased on account, $654,000.
- Raw materials use in production, $618,800. All of of the raw materials were used as direct materials.
- The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000.
- Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $417,000.
- Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $360,000.
- Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
- Jobs costing $1,539,250 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 $1,549,250 to manufacture according to their job cost sheets.
rev: 09_28_2018_QC_CS-140681
14. What is the gross margin for the year?
Gross Margin:
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