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 (LL) W/CONNECT >C<
- Consider the following information Vanklomps Machining Inc for the month of March 2023:beginning finished goods inventory .......... $ 76,000beginning work in process inventory ........ $ 39,000direct labour costs ..................................... $ 42,000direct material costs .................................. $ 186,000ending finished goods inventory ............... $ 61,000ending work in process inventory ............. $ 27,000manufacturing overhead costs.................. $ 149,000operating expenses ................................... $ 107,000salary expense ........................................... $ 274,000sales revenue............................................. $ 953,000Requirements:1. Prepare a schedule of the cost of goods manufactured for March.2. Prepare a schedule of cost of goods sold for March.3. Prepare an income statement for March.arrow_forwardThe following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just completed year. Sales......... Raw materials inventory, beginning Raw materials inventory, ending. Purchases of raw materials Direct labor............. Manufacturing overhead........... Administrative expenses. $180 Selling expenses...... Work in process inventory, beginning....... Work in process inventory, ending.......... Finished goods inventory, beginning.... Finished goods inventory, ending.. The cost of the raw materials used in production during the year (in thousands of dollars) was: $40 $120 $910 $80 $20 $100 $130 O $160 $200 $160 $140 $40 $10 $130 $150arrow_forwardPremium Company is a manufacturing firm that uses job-order costing. The company's inventory balanceswere as follows at the beginning and end of the year: Beginning Balance Ending Balance Raw materials ........ P14,000 22,000 Work in process ...... 27,000 9,000 Finished goods ....... 62,000 77,000The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. Atthe beginning of the year, the company estimated that it would work 33,000 machine-hours and incurP231,000 in manufacturing overhead cost. The following transactions were recorded for the year:• Raw materials were purchased, P315,000.• Raw materials were requisitioned for used in production,P307,000 (P281,000 direct and P26,000 indirect).• The following employee costs were incurred: direct labor,P377,000; indirect labor,96,000; and administrativesalaries, P172,000.Selling costs, P147,000.• Factory utility costs, P10,000. • Depreciation for the year was P127,000 of which P120,000 is related to…arrow_forward
- Summit Company has provided the following inventory balances and manufacturing cost data for the month of January: Inventories: January 1 January 31 Direct materials ....... P30,000 P40,000 Work in process ........ P15,000 P20,000 Finished goods ......... P65,000 P50,000 Month of January Cost of goods manufactured ........ P515,000 Manufacturing overhead applied .... P150,000 Direct materials used ............. P190,000 Actual manufacturing overhead ..... P144,000 Under Summit's job-order costing system, any over or underapplied overhead is closed to the Cost of Goods Sold account at the end of the calendar year (i.e., December 31). 84. What was the total amount of direct material purchases during January? a. P180,000 b. P190,000 c. P195,000 d. P200,000 85. How much direct labor cost was incurred during January? a. P170,000 b. P175,000 c. P180,000 d.…arrow_forwardf. Income statement; cost of goods sold statement; factory overhead analysis. Ou October 1, the accountant of Columbus Company prepared a trial balance from which the following accounts were extracted: $9,800 4,070 Finished Goods (2,800 units).... Work in Process (1,200 units)..... Materials and Supplies........... Buildings.................... 40,700 ................ *********** 48,000 Accumulated Depreciation-Buildings... ****** $ 6,000 Machinery and Equipmen................................. Accumulated Depreciation-Machinery and Equipment........ 96,000 37,500 Office Equipment.......... ..………….….…….. 3,200 Accumulated Depreciation Office Equipment........ Accrued Payroll... 1,000 650arrow_forwardBakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Ending Balance Balance Raw materials ........ P14,000 P22,000 Work in process ...... 27,000 9,000 Finished goods ....... 62,000 77,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,000 machine-hours and incur P231,000 in manufacturing overhead cost. The following transactions were recorded for the year: Raw materials were purchased, P315,000. Raw materials were requisitioned for used in production, P307,000 (P281,000 direct and P26,000 indirect). The following employee costs were incurred: direct labor, P377,000; indirect labor, P96,000; and administrative salaries,…arrow_forward
- Verst Products Co. uses a process cost system and applies actual factory overhead to work in process at the end of the month. The following data came from the records for March: Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000 Variable factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,000 Fixed factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000 Selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . $ 40,000 Units produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 Units sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Selling price per unit . . . . . . . . . . . . . . . . . . .…arrow_forwardMoody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production . . . . . . . . 100,000Fixed manufacturing overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .$650,000Variable manufacturing overhead cost per machine-hour . . . . . . . . . . $3.00 Required:1. Compute the plantwide predetermined overhead rate.2. During the year, Job 400 was started and completed. The following information was available with respect to this job: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$450Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $210Machine-hours used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 Compute the total manufacturing cost assigned…arrow_forwardParmitan Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,000 Indirect materials included in manufacturing overhead . . . . . . . . . . . . . . . $8,000 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,000 Manufacturing overhead applied to work in process . . . . . . . . . . . . . . $41,000 Underapplied overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,000 Beginning Ending Inventories: Raw materials . . . . . . . . . . . . . . . . . . . …$24,000 $6,000 Work in process . . . . . . . . . . . . . . . . . . . ……………….$41,000 $38,000 Finished goods . . . . . . . . . . . . . . . . . …………………. $86,000…arrow_forward
- BJ Manufacturing Company uses Job Order Costing system to accumulate production costs. At the beginning of the year, the balances of the inventory accounts are as follows: P168,000 210,000 Raw Materials Inventory Work in Process Inventory Job 101... Job 102 ... Finished Goods Inventory Job 005 .. Job 006 ... P105,000 105,000 182,000 P 85,000 97,000 The summaries of transactions for the year are as follows: (a) Raw Materials costing P826,000 were purchased on account. (b) Materials issued to production, P785,000 distributed as follows: Job 101 P180,000 Job 102 P125,000 Indirect balance Job 103 P150,000 Job 104 P205,000 Job 105 P95,000 (c) Heat, light and power, factory plant, for the year was P116,000. (d) Depreciation for factory plant for the year, P190,000 (e) Marketing and administrative expenses, P250,000 (f) Production wages for the year was P1,250,000 of which 20% is for indirect laborers. The direct wages were distributed as: Job 101, 15%; Job 102, 20%; Job 103, 25%; Job 104,…arrow_forwardoody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production . . . . . . . . 100,000Fixed manufacturing overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .$650,000Variable manufacturing overhead cost per machine-hour . . . . . . . . . . $3.00 Required:1. Compute the plantwide predetermined overhead rate.2. During the year, Job 400 was started and completed. The following information was available with respect to this job: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$450Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $210Machine-hours used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 Compute the total manufacturing cost assigned…arrow_forwardPrepare Statements for a Manufacturing CompanyThe following balances are from the accounts of Hill Components:January 1 (Beginning) December 31 (Ending)Direct materials inventory ............... $48,100 $44,200Work-in-process inventory .............. 67,730 71,500Finished goods inventory ................ 15,600 18,200Direct materials used during the year amount to $59,800, and the cost of goods sold for the year was $68,900.RequiredFind the following by completing a cost of goods sold statement:a. Cost of direct materials purchased during the year.b. Cost of goods manufactured during the year.c. Total manufacturing costs incurred during the year.arrow_forward
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