Question

Required information [The following information applies to the questions displayed below.) Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: $50,500 Raw materials Work in process Finished goods $25,000 $38,100 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 $11.75 per direct labor-hour was based on a cost formula that estimated $470,000 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, $592,000. b. Raw materials used in production, $557,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $420,000; indirect labor, $150,000; selling and administrative salaries, $295,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $381,000. e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $320,000. 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 $1,399,450 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 $2,925,000. The jobs cost $1,409,450 to manufacture according to their job cost sheets.

REQUIREMENT

Answer 1

Req 5
Total Manufacturing Cost added to WIP:
Direct Material			5,57,000
Direct Labour used			4,20,000
Manufacturing overheads applied	4,81,750
Total Manufacturing Cost added to WIP:	14,58,750
Req 6.
Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
g.	Finished Goods inventory		13,99,450
	Work in Process inventory			13,99,450
	(for cost of goods completed)
Req 7.
WORK IN PROCESS INVENTORY ACCOUNT
Beginning balance		25,000	13,99,450	Finished Goods inventory
Raw material inventory	5,57,000
Wages payable		4,20,000
Manufacturing Overhead	4,81,750
Ending inventory		84,300
Req 8.
Total Actual Manufacturing Overheads Incurred:
Indirect Labour			1,50,000
Other Manufacturing Overheads incurred	3,20,000
Total Actual Manufacturing Overheads Incurred:	4,70,000