In: Accounting
Bunnell Corporation is a manufacturer that uses job-order
costing. On January 1, the company’s inventory balances...
Bunnell Corporation is a manufacturer that uses job-order
costing. On January 1, the company’s inventory balances were as
follows:
|
|
Raw materials |
$ |
40,000 |
Work in process |
$ |
18,000 |
Finished goods |
$ |
35,000 |
|
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 $16.25 per direct labor-hour was based on a cost
formula that estimated $650,000 of total manufacturing overhead for
an estimated activity level of 40,000 direct labor-hours. The
following transactions were recorded for the year:
- Raw materials were purchased on account, $510,000.
- Raw materials used in production, $480,000. All of of the raw
materials were used as direct materials.
- The following costs were accrued for employee services: direct
labor, $600,000; indirect labor, $150,000; selling and
administrative salaries, $240,000.
- Incurred various selling and administrative expenses (e.g.,
advertising, sales travel costs, and finished goods warehousing),
$367,000.
- Incurred various manufacturing overhead costs (e.g.,
depreciation, insurance, and utilities), $500,000.
- Manufacturing overhead cost was applied to production. The
company actually worked 41,000 direct labor-hours on all jobs
during the year.
- Jobs costing $1,680,000 to manufacture according to their job
cost sheets were completed during the year.
- Jobs were sold on account to customers during the year for a
total of $2,800,000. The jobs cost $1,690,000 to manufacture
according to their job cost sheets.
TRANSACTION |
GENERAL JOURNAL |
DEBIT |
CREDIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
need to fill out journal ledger