Required information

Skip to question

[The following information applies to the questions displayed below.]

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:

1. Raw materials were purchased on account, $690,000.
2. Raw materials used in production, $660,000. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $440,000; indirect labor, $150,000; selling and administrative salaries, $260,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $462,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $340,000.
6. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
7. Jobs costing $1,542,950 to manufacture according to their job cost sheets were completed during the year.
8. 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.

6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the manufactured goods completed during this year.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?