Concept explainers
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 activity7 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 $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 $690,000 to manufacture according to their job cost sheets.
Required
6. What is the
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Managerial Accounting
- During March, the following costs were charged to the manufacturing department: $14886 for materials; $14,656 for labor; and $13,820 for manufacturing overhead. The records show that 30,680 units were completed and transferred, while 2,400 remained in ending inventory. There were 33,080 equivalent units of material and 31,640 of conversion costs. Using the weighted-average method, what is the cost of inventory transferred and the balance in work in process inventory?arrow_forwardOReilly Manufacturing Co.s cost of goods sold for the month ended July 31 was 345,000. The ending work in process inventory was 90% of the beginning work in process inventory. Factory overhead was 50% of the direct labor cost. No indirect materials were used during the period. Other information pertaining to OReillys inventories and production for July is as follows: Required: 1. Prepare a statement of cost of goods manufactured for the month of July. (Hint: Set up a statement of cost of goods manufactured, putting the given information in the appropriate spaces and solving for the unknown information. Start by using cost of goods sold to solve for the cost of goods manufactured.) 2. Prepare a schedule to compute the prime cost incurred during July. 3. Prepare a schedule to compute the conversion cost charged to Work in Process during July.arrow_forwardLeen Production Co. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of May: a. Compute the total production cost of each job. b. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. c. Compute the selling price per unit for each job, assuming a mark-on percentage of 40%. d. Prepare the journal entries to record the sale of Job 1065.arrow_forward
- Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. What was last years per unit product cost? a. 1.39 b. 4.40 c. 4.43 d. 3.01arrow_forwardDuring the year, a company purchased raw materials of $77,321 and incurred direct labor costs of $125,900. Overhead Is applied at the rate of 75% of the direct labor cost. These are the inventory balances: Compute the cost of materials used in production, the cost of goods manufactured, and the cost of goods sold.arrow_forwardSteinways records show their work in process Inventory had a beginning balance of $3,000 and an ending balance of $3,500. How much overhead was applied if the records also show the following:arrow_forward
- Sterlings records show the work in process Inventory had a beginning balance of $4000 and an ending balance of $3,000. How much direct labor was incurred if the records also show :arrow_forwardA company has the following information relating to its production costs: Compute the actual and applied overhead using the companys predetermined overhead rate of $23.92 per machine hour. Was the overhead over applied or under applied, and by how much?arrow_forwardJob order cost sheets show the following costs assigned to each job: The company assigns overhead at $1.25 for each direct labor dollar spent. What is the total cost for each of the jobs?arrow_forward
- Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.arrow_forwardSCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Maupin Manufacturing Company. Prepare a schedule of cost of goods manufactured for the year ended December 31, 20--. Assume that all materials inventory items are direct materials. Work in process, January 1 77,000 Materials inventory, January 1 31,000 Materials purchases 35,000 Materials inventory, December 31 26,000 Direct labor 48,000 Overhead 20,000 Work in process, December 31 62,000arrow_forwardDavis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)arrow_forward
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