Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:       Raw materials $ 59,500 Work in process $ 37,600 Finished goods $ 61,800     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 $14.25 per direct labor-hour was based on a cost formula that estimated $570,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:   Raw materials were purchased on account, $634,000. Raw materials use in production, $598,400. All of of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $520,000; indirect labor, $150,000; selling and administrative salaries, $337,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $461,000. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $420,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. Jobs costing $1,645,750 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 $3,360,000. The jobs cost $1,655,750 to manufacture according to their job cost sheets Questions: A. What is the journal entry to record the transfer of completed jobs that is referred to in item g above? B. What is the ending balance in Work in Process? C. What is the total amount of actual manufacturing overhead cost incurred during the year?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

 

   
Raw materials $ 59,500
Work in process $ 37,600
Finished goods $ 61,800
 

 

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 $14.25 per direct labor-hour was based on a cost formula that estimated $570,000 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, $634,000.
  2. Raw materials use in production, $598,400. All of of the raw materials were used as direct materials.
  3. The following costs were accrued for employee services: direct labor, $520,000; indirect labor, $150,000; selling and administrative salaries, $337,000.
  4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $461,000.
  5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $420,000.
  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 $1,645,750 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 $3,360,000. The jobs cost $1,655,750 to manufacture according to their job cost sheets

Questions:

A. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?

B. What is the ending balance in Work in Process?

C. What is the total amount of actual manufacturing overhead cost incurred during the year?

Journal entry worksheet
1
Record the manufactured goods completed during this year.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
Transcribed Image Text:Journal entry worksheet 1 Record the manufactured goods completed during this year. Note: Enter debits before credits. Transaction General Journal Debit Credit 1
Work in Process
Beg. Bal.
End. Bal.
Transcribed Image Text:Work in Process Beg. Bal. End. Bal.
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