Bunnell Corporation is a manufacturer that uses joborder cos

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 $14.25 per direct labor-hour was based on a cost formula that estimated $570,000 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, $634,000.

Raw materials use in production, $598,400. All of of the raw materials were used as direct materials.

The following costs were accrued for employee services: direct labor, $520,000; indirect labor, $150,000; selling and administrative salaries, $337,000.

Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $461,000.

Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $420,000.

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

Jobs costing $1,645,750 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 $3,360,000. The jobs cost $1,655,750 to manufacture according to their job cost sheets.

Required:

1. What is the journal entry to record raw materials used in production? (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.)

Raw materials	$	59,500
Work in process	$	37,600
Finished goods	$	61,800

Solution

Work in process 598400         Raw materials 598400 To record raw materials used in production