a. Raw materials were purchased on account, $590,000. b. Raw materials used in production, $546,400. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $540,000; indirect labor, $150,000; selling and administrative salaries, $250,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $394,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $440,000. f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. g. Jobs costing $1,610,950 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 $3,082,500. The jobs cost $1,620,950 to manufacture according to their job cost sheets.
a. Raw materials were purchased on account, $590,000. b. Raw materials used in production, $546,400. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $540,000; indirect labor, $150,000; selling and administrative salaries, $250,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $394,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $440,000. f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. g. Jobs costing $1,610,950 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 $3,082,500. The jobs cost $1,620,950 to manufacture according to their job cost sheets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Domestic
Transcribed Image Text: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
$ 48,000
$ 19,400
$ 56,100
The company applies overhead cost to jobs using direct labor-hours. For this year, the company's predetermined
overhead rate of $14.75 per direct labor-hour was based on a cost formula that estimated $590,000 of total manufacturing
overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded this year:
a. Raw materials were purchased on account, $590,000.
b. Raw materials used in production, $546,400. All of of the raw materials were used as direct materials.
c. The following costs were accrued for employee services: direct labor, $540,000; indirect labor, $150,000; selling and
administrative salaries, $250,000.
d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods
warehousing), $394,000.
e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $440,000.
f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all
jobs during the year.
g. Jobs costing $1,610,950 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 $3,082,500. The jobs cost $1,620,950 to
manufacture according to their job cost sheets.
6. What is the journal entry to record the transfer of completed jobs referred to in item g above?
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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