Manufacturing and Direct Labor
Birmingham Bowling Ball Company (BBBC) uses a job-order costing system to accumulate manufacturing costs. The company’s work-in-process on December 31, 20x3, consisted of one job (no. 3088), which was carried on the year-end balance sheet at $78,400. There was no finished-goods inventory on this date.
BBBC applies manufacturing overhead to production on the basis of direct-labor cost. Budgeted totals for 20x4 for direct labor and manufacturing overhead are $2,100,000 and $2,730,000, respectively.
Actual results for the year follow.
Direct material used ................................................................................................................................ $2,800,000
Direct labor ............................................................................................................................................. 2,175,000
Indirect material used ............................................................................................................................... 32,500
Indirect labor ........................................................................................................................................... 1,430,000
Factory depreciation ................................................................................................................................ 870,000
Factory insurance .................................................................................................................................... 29,500
Factory utilities ........................................................................................................................................ 415,000
Selling and administrative expenses .......................................................................................................... 1,080,000
Total ................................................................................................................................................... $8,832,000
BBBC applies manufacturing overhead to production on the basis of direct-labor cost. Budgeted totals for 20x4 for direct labor and manufacturing overhead are $2,100,000 and $2,730,000, respectively.
Actual results for the year follow.
Direct material used ................................................................................................................................ $2,800,000
Direct labor ............................................................................................................................................. 2,175,000
Indirect material used ............................................................................................................................... 32,500
Indirect labor ........................................................................................................................................... 1,430,000
Factory depreciation ................................................................................................................................ 870,000
Factory insurance .................................................................................................................................... 29,500
Factory utilities ........................................................................................................................................ 415,000
Selling and administrative expenses .......................................................................................................... 1,080,000
Total ................................................................................................................................................... $8,832,000