Question

4 Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: of 15 Raw materials Work in process Finished goods $ 40,000 $ 18, $ 35,eee 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 $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 for the year. ences a. Raw materials were purchased on account, $510,000 b. Raw materials use 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 (eg.. 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 < Prev 14 15 of 15 Next > e to search

Answer 1

14)

Sales Revenue	$2,800,000
Less: Cost of Goods Sold	($1,690,000)
Gross Margin	$1,110,000
Therefore, gross margin for the year is $1,110,000.