Bunnell Corporation is a manufacturer that uses job-ordercosting. On January 1, the company’s inventory balances were asfollows:
| |
| Raw materials | $ | 77,500 |
| Work in process | $ | 32,800 |
| Finished goods | $ | 34,800 |
|
The company applies overhead cost to jobs on the basis of directlabor-hours. For the current year, the company’s predeterminedoverhead rate of $12.75 per direct labor-hour was based on a costformula that estimated $510,000 of total manufacturing overhead foran estimated activity level of 40,000 direct labor-hours. Thefollowing transactions were recorded for the year:
- Raw materials were purchased on account, $654,000.
- Raw materials use in production, $618,800. All of of the rawmaterials were used as direct materials.
- The following costs were accrued for employee services: directlabor, $460,000; indirect labor, $150,000; selling andadministrative salaries, $270,000.
- Incurred various selling and administrative expenses (e.g.,advertising, sales travel costs, and finished goods warehousing),$417,000.
- Incurred various manufacturing overhead costs (e.g.,depreciation, insurance, and utilities), $360,000.
- Manufacturing overhead cost was applied to production. Thecompany actually worked 41,000 direct labor-hours on all jobsduring the year.
- Jobs costing $1,539,250 to manufacture according to their jobcost sheets were completed during the year.
- Jobs were sold on account to customers during the year for atotal of $3,172,500. The jobs cost $1,549,250 to manufactureaccording to their job cost sheets.
Required :
6. What is the journal entry to record the transfer of completedjobs that is referred to in item g above?
7. What is the ending balance in Work in Process?
8. What is the total amount of actual manufacturing overheadcost incurred during the year?
9. Is manufacturing overhead underapplied or overapplied for theyear? By how much?
10. What is the cost of goods available for sale during theyear?
