Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost driversand rates.Activity CentersMaterials inspectionEquipment maintenanceMachine setupsPacking and shippingDirect materials costs were $552,000 and direct labor costs were $392,000 during November, when the plant finished 7,000 poundsof product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories.Beginning BalanceRequired:Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work-in-Process Inventory and out to Finished Goods Inventory. Use the accounts Materials Inventory, Wages Payable, Work-in-ProcessInventory, Finished Goods Inventory, and four overhead applied accounts.Ending BalanceBeginning BalanceEnding BalanceCost DriversDirect materials costMachine-hoursNumber of production runsPounds of finished outputDebitDebitMaterials InventoryCreditWork in processOverhead Applied: Materials InspectionRate per Cost Driver Unit15% of materials cost$ 30 per machine-hour$ 6,480 per setup$5.30 per poundCreditBeginning BalanceEnding BalanceBeginning BalanceEnding BalanceDebitWages PayableDebitCheck my worCreditWork in processOverhead Applied: Equipment MaintenanceCredit

Activity-based product costing seeks to offer a more accurate and comprehensive view of cost…

Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Activity Centers Materials inspection Equipment maintenance. Machine setups Packing and shipping. Cost Drivers Direct materials cost Machine-hours Number of production runs Pounds of finished output Rate per Cost Driver Unit 15% of materials cost. $30 per machine-hour $ 6,480 per setup $5.30 per pound Direct materials costs were $552,000 and direct labor costs were $392,000 during November, when the plant finished 7,000 pounds of product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories.

Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Activity Centers Materials inspection Equipment maintenance. Machine setups Packing and shipping. Cost Drivers Direct materials cost Machine-hours Number of production runs Pounds of finished output Rate per Cost Driver Unit 15% of materials cost. $30 per machine-hour $ 6,480 per setup $5.30 per pound Direct materials costs were $552,000 and direct labor costs were $392,000 during November, when the plant finished 7,000 pounds of product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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