Question

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materialsS Work in process 25,000 Finished goods38,100 ş 50,500 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 use 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 41,000iect 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

Answer 1

1)	Transaction	General Journal					Debit	Credit
	b.	Work in process inventory					557,000
		Raw materials inventory						557,000
2)	Ending balance in Raw Materials
	Raw materials
	Beg.bal	50,500
	a.	592,000	557,000	b.
	End bal	85,500
3)	Transaction	General Journal					Debit	Credit
	c.	Work in process inventory					420,000
		Manufacturing overhead					150,000
		Selling & administrative salaries					295,000
		Factory wages payable						865,000
4)	Manufacturing overhead applied ($11.75*41,000 DLH's)						481750	answer
5)	Total manufacturing cost added during the year
	Direct materials				557,000
	Direct labor				420,000
	overhead applied				481,750
	Total.				1,458,750
	total manufacturing cost				1,458,750	answer
6)	Transaction	General Journal					Debit	Credit
	g.	Finished goods inventory					1,399,450
		Work in process inventory						1,399,450