5. What is the total manufacturing cost added to Work in Process during the year?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

 

[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 $ 74,000
Work in process $ 31,800
Finished goods $ 52,200
 

 

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 $14.50 per direct labor-hour was based on a cost formula that estimated $580,000 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, $641,800. All of of the raw materials were used as direct materials.
  3. The following costs were accrued for employee services: direct labor, $530,000; indirect labor, $150,000; selling and administrative salaries, $308,000.
  4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $457,000.
  5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $430,000.
  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 $1,703,300 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 $3,510,000. The jobs cost $1,713,300 to manufacture according to their job cost sheets.

 

5. What is the total manufacturing cost added to Work in Process during the year?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education