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 $ 79,000 $ 25,600 $ 37,200 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 $12.25 per direct labor-hour was based on a cost formula that estimated $490,000 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, $690,000. b. Raw materials used in production, $660,000. All of of the raw materials were used as direct materials. c. The following costs were accrued for employee services: direct labor, $440,000; indirect labor, $150,000; selling and administrative salaries, $260,000. d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $462,000, e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $340,000. 1. 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 $1,542,950 to manufacture according to their job cost sheets were completed during the year. hinhs were sold on Anunt to customers in the var forstotal of 179 An Thlab

Answer 1

Total manufacturing costs Raw material used Direct labor used Manufacturig overhead applied Total manufacturing costs $ $ $ $ 660,000 440,000 502,250 1,602,250 Manufacturing overhead applied = actual direct labor hours * predetermined rate = 41,000 * $ 12.25 = $ 502,250