Question

3 Required information The Foundational 15 (LO3-1, LO3-2, LO3-3, LO3-4) [The following information applies to the questions displayed below. of 15 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 $ 66,000 $ 33,600 $ 38,400 ok nt ences 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 $13.50 per direct labor-hour was based on a cost formula that estimated $540,000 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, $684,000. b. Raw materials used in production, $646,400. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $490,000; indirect labor, $150,000; selling and administrative salaries, $319,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $423,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $390,000. 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 $1,623,300 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 $3,547,500. The jobs cost $1,633,300 to manufacture according to their job cost sheets.

Answer 1

Calculation of Adjusted COGS: Applied Overheads 41000*13.5 $ 5,53,500 Actual Overheads = 150000 + 390000 $ 5,40,000 Over Applied OH = 553500-540000 $ 13,500 $ 16,19,800 Adjusted Cost Of Goods Sold (1633300-13500) Kindly Comment down for any clarifications/ queries and please upvote.