15. What is the net operating income for the year? Net operating income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am. 108.
![Required information
[The following information applies to the questions displayed below.]
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, $150,000, 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 (e.g. depreciation, Insurance, and utilities), $500.000
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.
h. Jobs were sold on account to customers during the year for a total of $2,800,000. The Jobs cost $1,690,000 to
manufacture according to their job cost sheets.
15. What is the net operating income for the year?
Net operating income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8d62a6d-92d4-4161-9b7c-3d5cd4223c2b%2Fe7a0ca95-d4b0-412f-8440-47924fa3e1fe%2Fsdu7qa8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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, $150,000, 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 (e.g. depreciation, Insurance, and utilities), $500.000
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.
h. Jobs were sold on account to customers during the year for a total of $2,800,000. The Jobs cost $1,690,000 to
manufacture according to their job cost sheets.
15. What is the net operating income for the year?
Net operating income
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