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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 Finished
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 Finished goods $ 40,000 $ 18,000 $ 35,000 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 $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 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 $510,000, b. Raw materials used in production, $480,000. All of of the raw materials were used as direct materials c. The following costs were accrued for employee services: direct labor, $600.000; indirect labor, S150.000; selling and administrative salaries $240,000. d. Incurred various selling and administrative expenses (e.g, advertising, sales travel costs, and finished goods warehousing). $367,000. e. Incurred various manufacturing overhead costs (eg, depreciation, insurance, and utilities), S500.000, f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year 9. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year n. Jobs were sold on account to customers during the year for a total of $2.800,000 The Jobs cost $1690,000 to manufacture according to their job cost sheets
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