9. Is manufacturing overhead underapplied or overapplied for the year? By how much? 13. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:
| Raw materials | $ 60,500 |
|---|---|
| Work in process | $ 20,800 |
| Finished goods | $ 57,600 |
The company applies
- Raw materials were purchased on account, $622,000.
- Raw materials used in production, $591,800. All of of the raw materials were used as direct materials.
- The following costs were accrued for employee services: direct labor, $400,000; indirect labor, $150,000; selling and administrative salaries, $280,000.
- Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $400,000.
- Incurred various manufacturing overhead costs (e.g.,
depreciation , insurance, and utilities), $300,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.- Jobs costing $1,360,750 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 $3,330,000. The jobs cost $1,370,750 to manufacture according to their job cost sheets.
Foundational 3-9 (Algo)
9. Is manufacturing overhead underapplied or overapplied for the year? By how much?
13. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?
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