[The following information applies to the questions displayed below.] Bunnell Co

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[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: Part 7 of 15 Raw materials $77,500 Work in process Finished goods 0.2 points $32,800 $34,800 eBooK 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 $12.75 per direct labor-hour was based on a cost formula that estimated $510,000 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, $654,000 b. Raw materials use in production, $618,800. All of of the raw materials were used as direct materials c. The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000 d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finishecd goods warehousing), $417000 e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $360,000 f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct g. Jobs costing $1,539,250 to manufacture according to their job cost sheets were completed during the h. Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost labor-hours on all jobs during the year year $1,549,250 to manufacture according to their job cost sheets. Foundational 3-7 7. What is the ending balance in Work in Process? ork in Process Beg. Bal End. Bal

Explanation / Answer

Ending balance in WIP Beginning Balance 32800 1539250 adjustment (g) Adjustment (b) 618800 Adjustment © 460000 adjustment (f) 41000*12.75 522750 total 1634350 Ending balance {total-adjustment(g)} 95100 Ending Balance in Finished Goods Beginning Balance 34800 Adjsutment (g) 1539250 1549250 Adjustment (h) total 1574050 Ending Balance ( total- adjustment h) 24800 calculation of adjusted cost og goods sold over applied overhead (360000+150000)-522750 overapplied overhead = 12750 adjusted cost of goods sold = 1549250-12750 = 1536500 here 522750 = 41000*12.75

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