Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager...
Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager has estimated the following cost drivers and rates:
Activity Centers Cost Drivers Rate per Cost Driver Unit
Materials handling Pounds of material handled $ 16 per pound
Quality inspections Number of inspections $ 220 per inspection
Machine setups Number of machine setups $ 2,900 per setup
Running machines Number of machine-hours $ 24.00 per hour
Direct materials costs were $317,000 and direct labor costs were $156,000 during July, when the Fabrication Department handled 3,800 pounds of materials, made 790 inspections, had 50 setups, and ran the machines for 14,000 hours.
Required: Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work-in-Process Inventory and out to Finished Goods Inventory.
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Homework Answers
| Particulars | Cost Driver | Units | Amount |
| Materials | $ 3,17,000 | ||
| Wages | $ 1,56,000 | ||
| Overhead Applied: Materials Handling | Material handled $ 16 per pound | 3,800 | $ 60,800 |
| Overhead Applied: Quality Inspections | Number of inspections $ 220 per inspection | 790 | $ 1,73,800 |
| Overhead Applied: Machine Setups | Number of machine setups $ 2,900 per setup | 50 | $ 1,45,000 |
| Overhead Applied: Running Machines | Number of machine-hours $ 24.00 per hour | 14,000 | $ 3,36,000 |
| Total Cost | $ 11,88,600 |
Starting from materials, then wages and to the overhead cost will be flown through Work-in-Process Inventory and out to Finished Goods Inventory. Total cost of Finished goods inventory is $ 11,88,600.
Add Answer to:
Southwest Components recently switched to activity-based costing
from the department allocation method. The Fabrication Department
manager...
Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager...
Southwest Components recently switched to activity-based costing
from the department allocation method. The Fabrication Department
manager has estimated the following cost drivers and rates:
Activity Centers
Cost Drivers
Rate per
Cost Driver Unit
Materials handling
Pounds of material handled
$
15
per pound
Quality inspections
Number of inspections
$
230
per inspection
Machine setups
Number of machine setups
$
2,700
per setup
Running machines
Number of machine-hours
$
22.00
per hour
Direct materials costs were $304,000 and direct labor costs...
Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager...
Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager has estimated the following cost drivers and rates: Activity Centers Cost Drivers Rate per Cost Driver Unit Materials handling Pounds of material handled $ 17 per pound Quality inspections Number of inspections $ 210 per inspection Machine setups Number of machine setups $ 2,500 per setup Running machines Number of machine-hours $ 22.00 per hour Direct materials costs were $282,000 and direct labor costs...
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*** Where I put numbers might not actually
even have a number.
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1428 points Soune Components recently wached to active based costing from the department canon had the con Department a n d the Marts handing Machines Hunsing machines pectos of machine Deci materials costs were 5304,000 and decor costs were $158.000 dung when Fanation Department 1.700 pounds co d User accounts to show the of manera labor and overhead costs from the four overhead a cr o ga Work in Process inventory and the doo r Overhead Applied Material Handling Overhead...
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The Mega Construction Company recently switched to activity based costing (ABC) from the department allocation method....
The Mega Construction Company recently switched to activity based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $60 per machine hour The cost accountant for the Finishing Department has gathered the following data Amount $ 95 Activity Matenal handling Mochine Setups tes Quality Control Cost Drivers Tons of material Handled Number of production runs Machine Hours Number of inspections 2500 thing Department groductions using a total of 15.000 machine hours in...
The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The...
The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $40 por machine hour. The cost accountar or t h ing Department has gathered the following data: Cost Drivers Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 60 3,650 Material handling Machine setups utilities Quality control 100 During April, Mega purchased and used $135,000 of direct materials at...
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Activity-Based Costing Slack Corporation has the following predicted indirect costs and cost drivers for 2016 for...
Activity-Based Costing Slack Corporation has the following predicted indirect costs and cost drivers for 2016 for the given activity cost pools Fabrication Department Finishing Department Cost Driver Maintenance Materials handling Machine setups Inspections $35,000 30,000 70,000 $25,000 Machine hours 15,000 Material moves 5,000 Machine setups 25,000 Inspection hours $135,000 $70,000 The following activity predictions were also made for the year: Machine hours Material moves Machine setups Inspection hours Fabrication Department Finishing Department 5,000 1,500 50 1,000 10,000 3,000 700 It...
Southwest Components recently switched to activity-based costing
from the department allocation method. The Fabrication Department
manager has estimated the following cost drivers and rates:
Activity Centers
Cost Drivers
Rate per
Cost Driver Unit
Materials handling
Pounds of material handled
$
15
per pound
Quality inspections
Number of inspections
$
230
per inspection
Machine setups
Number of machine setups
$
2,700
per setup
Running machines
Number of machine-hours
$
22.00
per hour
Direct materials costs were $304,000 and direct labor costs...
*** Where I put numbers might not actually
even have a number.
Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager has estimated the following cost drivers and rates: Activity Centers Materials handling Quality inspections Machine setups Running machines Cost Drivers Pounds of material handled Number of inspections Number of machine setups Number of machine-hours Rate per Cost Driver Unit $ 36 per pound $ 450 per inspection $5,400 per setup $ 45...
1428 points Soune Components recently wached to active based costing from the department canon had the con Department a n d the Marts handing Machines Hunsing machines pectos of machine Deci materials costs were 5304,000 and decor costs were $158.000 dung when Fanation Department 1.700 pounds co d User accounts to show the of manera labor and overhead costs from the four overhead a cr o ga Work in Process inventory and the doo r Overhead Applied Material Handling Overhead...
Recently, MAKS Corp. switched to activity-based costing (ABC) from the department allocation method, where the company allocated overhead costs at a rate of $70 per machine hour. The company reported the following data for its Finishing Department: Activity Material handling Machine setups Utilities Quality control Cost Drivers Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 90 3,600 30 400 During May, the company purchased and used $135,000 of direct materials at $25 per...
The Mega Construction Company recently switched to activity based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $60 per machine hour The cost accountant for the Finishing Department has gathered the following data Amount $ 95 Activity Matenal handling Mochine Setups tes Quality Control Cost Drivers Tons of material Handled Number of production runs Machine Hours Number of inspections 2500 thing Department groductions using a total of 15.000 machine hours in...
The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $40 por machine hour. The cost accountar or t h ing Department has gathered the following data: Cost Drivers Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 60 3,650 Material handling Machine setups utilities Quality control 100 During April, Mega purchased and used $135,000 of direct materials at...
Activity-Based Costing Slack Corporation has the following predicted indirect costs and cost drivers for 2016 for the given activity cost pools: Maintenance Materials handling Machine setups Inspections Fabrication Department Finishing Department Cost Driver $35,000 $25,000 Machine hours 30,000 15,000 Material moves 70,000 5,000 Machine setups 25,000 Inspection hours $135,000 $70,000 The following activity predictions were also made for the year: Machine hours Material moves Machine setups Inspection hours Fabrication Department Finishing Department 10,000 5,000 3,000 1,500 700 1,000 50 It...
Activity-Based Costing Slack Corporation has the following predicted indirect costs and cost drivers for 2016 for the given activity cost pools Fabrication Department Finishing Department Cost Driver Maintenance Materials handling Machine setups Inspections $35,000 30,000 70,000 $25,000 Machine hours 15,000 Material moves 5,000 Machine setups 25,000 Inspection hours $135,000 $70,000 The following activity predictions were also made for the year: Machine hours Material moves Machine setups Inspection hours Fabrication Department Finishing Department 5,000 1,500 50 1,000 10,000 3,000 700 It...
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