Question

Bunnell Corporation is a manufacturer that uses job-order costing. On January , the company's inventory balances were as follows: 6. What is the journal entry to record the transfer of completed jobs that is referred to in tem gabove? (if no entry is required for a transaction/event, select "No journal entry required in the first account field.) Record the manufactured goods completed during thio vear. Work in process 00 Note: Cher debts before cred to 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 $13.00 per direct labor hour was based on a cost formula that estimated 5520 000 of total manufacturing overhead for an estimated activity level of 40.000 direct labor hours. The following transactions were recorded for the year Transaction General Journal Debit Credit a Raw materials were purchased on account $584000 b. Raw materials use in production S537600. All of of the raw materials were used as direct materials The following costs were accrued for employee services: direct labor. $470,000 indirect labor $150,000selling and administrative salanes $249.000 d. Incurred various selling and administrative expenses (eg, advertising, sales travel costs, and finished goods warehousingl. $464.000. e incurred various manufacturing overhead costs leg. deorection, insurance, and winesl $370.000 Manufacturing overhead cost was applied to production. The company actually worked 41.000 direct labor hours on all jobs during the year. 9 Jobs costing $1,478,700 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 $3.367.500. The jobs cost $1.488.700 10 manufacture according to their job cost sheets Required: 1 What is the journal entry to record raw materials used in production? If no entry is required for a transaction event select "No journal entry required in the first account field.) Journal entry worksheet 7. What is the ending balance in Work in Process? Work in Process Beg Bal. Record the raw materials used in production, End. Bal. olo Noce de lei. 8. What is the total amount of actual manufacturing overhead cost incurred during the year? Transaction General Inurnal Dahit Cart Total actual manufacturing overhead cost 9. Is manufacturing overhead underapplied or overapplied for the year? By how much? 10. What is the cost of goods available for sale during the year? 2. What is the ending balance in Raw Materials? Cost of goods available for sale Raw Materials Beg. Bal. 11 What is the journal entry to record the cost of goods sold referred to in item habove? (f no entry is required transaction/event, select "No journal entry required" in the first account field.) Rccord the cost of gcoce cold do the euctomar End. Bal. 0 Icte Entor te bere crocita Tranકાયtiા | Gwel Journal Dw C rwuit Record the accrued labor coss. Note: Enter dabite Safore credits Trancaction Goneral Journal Dobit Crodt 12. What is the ending balance in Finished Goods? linished Coode Beg Bal End BEL 0 0 4. What is the total amount of manufacturing overhead applied to production during the year? 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? Manufacturing overhead applied Ajusted cost of goods sold 5. What is the total manufacturing cost added to Work in Process during the year? 14. What is the gross margin for the year? Total manufacturing cost Gross margin 15. What is the net operating income for the year? Net operating income

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 $13.00 per direct labor-hour was based on a cost formula that estimated $520,000 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, $584,000.
2. Raw materials use in production, $537,600. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $470,000; indirect labor, $150,000; selling and administrative salaries, $249,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $464,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $370,000.
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 $1,478,700 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 $3,367,500. The jobs cost $1,488,700 to manufacture according to their job cost sheets.

Answer 1

1)

Transaction	General Journal	Debit	Credit
1.	Work in process inventory	$537600
	Raw materials inventory		$537600
	(To record raw materials used in production)

2)

Raw Materials
Beg. bal.	$63500
(a)	584000
		537600	(b)
End. bal.	$109900

3)

Transaction	General Journal	Debit	Credit
1.	Work in process inventory	$470000
	Manufacturing overhead	$150000
	Selling and administrative expenses	$249000
	Wages payable		$869000
	(To record accrued labor costs)

4) Manufacturing overhead applied= 41000*$13.00= $533000

5) Total manufacturing costs= Direct materials+Direct labor+Manufacturing overhead applied

= $537600+470000+533000= $1540600

6)

Transaction	General Journal	Debit	Credit
1.	Finished goods inventory	$1478700
	Work in process inventory		$1478700
	(To record transfer of completed jobs)

7)

Work in Process
Beg. bal.	$32000
b.	537600
c.	470000
f.	533000	1478700	g.
End. bal.	$93900

8) Total actual manufacturing costs= $370000+150000= $520000

9) Underapplied or overapplied overhead= Total actual manufacturing costs-Manufacturing overhead applied

= $520000-533000= $13000 overapplied

10) Cost of goods available for sale= Beginning balance of finished goods+Cost of goods manufactured

= $36000+1478700= $1514700

11)

Transaction	General Journal	Debit	Credit
1.	Cost of goods sold	$1488700
	Finished goods inventory		$1488700
	(To record cost of goods sold)

12)

Finished Goods
Beg. bal.	36000
(g)	1478700
		1488700	(h)
End. bal.	$26000

13) Adjusted cost of goods sold= Unadjusted cost of goods sold-Overapplied overhead

= $1488700-13000= $1475700

14) Gross margin= Sales-Adjusted cost of goods sold

= $3367500-1475700= $1891800

15) Selling and administrative expenses= $249000+464000= $713000

Net operating income= Gross margin-Selling and administrative expenses

= $1891800-713000= $1178800