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 using direct labor-hours. For this 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 this 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. g. 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 this year? Net operating income

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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
Work in process
Finished goods
$ 40,000
$ 18,000
$ 35,000
The company applies overhead cost to jobs using direct labor-hours.
For this 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 this 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.
g. 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 this year?
Net operating income
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 $ 40,000 $ 18,000 $ 35,000 The company applies overhead cost to jobs using direct labor-hours. For this 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 this 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. g. 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 this year? Net operating income
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