Question

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 $ 77,500 $ 32,800 $ 34,800 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 $12.75 per direct labor-hour was based on a cost formula that estimated $510,000 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, $654,000. b. Raw materials used in production, $618,800. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000. d. Incurred various selling and administrative expenses (0.g., advertising, sales travel costs, and finished goods warehousing). $417,000. e. Incurred various manufacturing overhead costs (0.9., depreciation, insurance, and utilities), $360,000, . 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 $1,539,250 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 $1,549,250 to manufacture according to their job cost sheets.

Answer 1

WORK IN PROCESS INVENTORY ACCOUNT
Beginning balance		32,800	15,39,250	g. Finished Goods inventory
b. Raw material inventory	6,18,800
c. Wages payable		4,60,000
f. Mfg Overheads (41000*12.75)	5,22,750
Ending balance		95,100
FINISHED GOODS INVENTORY ACCOUNT
Beginning balance		34,800	15,49,250	h. Cost of goods sold
g. Work in Process inventory	15,39,250
Ending balance		24,800