Question
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the companys inventory balances were as follows: Raw materials $ 63,500 Work in
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the companys inventory balances were as follows:
Raw materials | $ 63,500 |
---|---|
Work in process | $ 32,000 |
Finished goods | $ 36,000 |
The company applies overhead cost to jobs using direct labor-hours. For this year, the companys predetermined overhead rate of $13.00 per direct labor-hour was based on a cost formula that estimated $520,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded this year:
- Raw materials were purchased on account, $584,000.
- Raw materials used in production, $537,600. All of of the raw materials were used as direct materials.
- The following costs were accrued for employee services: direct labor, $470,000; indirect labor, $150,000; selling and administrative salaries, $249,000.
- Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $464,000.
- Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $370,000.
- Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
- Jobs costing $1,478,700 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 $3,367,500. The jobs cost $1,488,700 to manufacture according to their job cost sheets.
8. What is the total actual manufacturing overhead cost incurred for this year?
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