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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 $ 84,500 $ 35,000 $ 44, 100 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 $12.50 per direct labor-hour was based on a cost formula that estimated $500,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: a. Raw materials were purchased on account, $614,000. b. Raw materials used in production, $567,600. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $450,000; indirect labor, $150,000; selling and administrative salaries, $290,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $375,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $350,000. 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 $1,461,900 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 $3,172,500. The jobs cost $1,471,900 to manufacture according to their job cost sheets.

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 $ 84,500 $ 35,000 $ 44, 100 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 $12.50 per direct labor-hour was based on a cost formula that estimated $500,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: a. Raw materials were purchased on account, $614,000. b. Raw materials used in production, $567,600. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $450,000; indirect labor, $150,000; selling and administrative salaries, $290,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $375,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $350,000. 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 $1,461,900 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 $3,172,500. The jobs cost $1,471,900 to manufacture according to their job cost sheets.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What is the ending balance in Work in Process?

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 $ 84,500 $ 35,000 $ 44, 100 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 $12.50 per direct labor-hour was based on a cost formula that estimated $500,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year. a. Raw materials were purchased on account, $614,000. b. Raw materials used in production, $567,600. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $450,000; indirect labor, $150,000; selling and administrative salaries, $290,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $375,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $350,000. 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 $1,461,900 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 $3,172,500. The jobs cost $1,471,900 to manufacture according to their job cost sheets.
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 $ 84,500 $ 35,000 $ 44, 100 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 $12.50 per direct labor-hour was based on a cost formula that estimated $500,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year. a. Raw materials were purchased on account, $614,000. b. Raw materials used in production, $567,600. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $450,000; indirect labor, $150,000; selling and administrative salaries, $290,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $375,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $350,000. 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 $1,461,900 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 $3,172,500. The jobs cost $1,471,900 to manufacture according to their job cost sheets.
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The cost of goods manufactured comprises of direct materials, direct labor cost, and overhead Applied. 

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