The Foundational 15 [LO3-1, LO3-2, LO3-3, LO3-4]

[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:

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 $15.75 per direct labor-hour was based on a cost formula that estimated $630,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

Raw materials were purchased on account, $646,000.

Raw materials use in production, $608,000. All of of the raw materials were used as direct materials.

The following costs were accrued for employee services: direct labor, $580,000; indirect labor, $150,000; selling and administrative salaries, $317,000.

Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $376,000.

Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $480,000.

Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.

Jobs costing $1,765,050 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 $2,970,000. The jobs cost $1,775,050 to manufacture according to their job cost sheets.

Foundational 3-11

11. What is the journal entry to record the cost of goods sold referred to in item h above?



Raw materials



Work in process



Finished goods