Saved Required information The following information applies to the questions di

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Saved Required information The following information applies to the questions displayed below Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Rav materials 50,500 Work in process 25,000 Finished goods 38,100 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 41,000 direct 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 Required

Explanation / Answer

12) Ending balance of finished goods :

End balance of finished goods = $28100

13) Overhead applied = 41000*11.75 = 481750

Actual overhead = 150000+320000 = 470000

Overapplied overhead = 481750-470000 = 11750

Adjusted cost of goods sold = 1409450-11750 = $1397700

14) Gross profit = 2925000-1397700 = $1527300

15) Net operating income = 1527300-295000-381000 = 851300

Beg Bal 38100 Cost of goods sold 1409450 Cost of goods manufactured 1399450 End balance 28100

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