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 Cost Drivers Pounde of saterial handled unber of inapectione Munber of nachine setupe uber of achine-bours ate per Cont Driver it per pound 450 per inepection 5,400 per setup 45 per hour Activity Centers Quality inapections Machine setupe huseing sachines Direct materials costs were $600,000 and direct labor costs were $300,000 during July, when the Fabrication Department handled 3.000 pounds of materials, made S00 inspections, had 25 setups, and ran the machines for 10,000 hours Required Use T-accounts to show the flow of materials, labor, and overhead costs trom the four overhead activity centers through Work-in- Process Inventory and out to Finished Goods inventory. Materials inventory Wages Payable Bng be Deg b End be End be Overhead Apped Materials Handing Overhead Appled Quality inpection Ce b Deg te End be End be Overtead Appled Machine Betups Overhead Applied Running Machines Deg ba Deg be End Se End be Work in Process (wP) ventery Fabrication Departant Finished Goods Invenory
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 Cost Drivers Pounde of saterial handled unber of inapectione Munber of nachine setupe uber of achine-bours ate per Cont Driver it per pound 450 per inepection 5,400 per setup 45 per hour Activity Centers Quality inapections Machine setupe huseing sachines Direct materials costs were $600,000 and direct labor costs were $300,000 during July, when the Fabrication Department handled 3.000 pounds of materials, made S00 inspections, had 25 setups, and ran the machines for 10,000 hours Required Use T-accounts to show the flow of materials, labor, and overhead costs trom the four overhead activity centers through Work-in- Process Inventory and out to Finished Goods inventory. Materials inventory Wages Payable Bng be Deg b End be End be Overhead Apped Materials Handing Overhead Appled Quality inpection Ce b Deg te End be End be Overtead Appled Machine Betups Overhead Applied Running Machines Deg ba Deg be End Se End be Work in Process (wP) ventery Fabrication Departant Finished Goods Invenory
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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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.
![Required:
Use T-eccounts 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.
Wages Payable
Materials Inventory
Beg bal
Beg. bal
End. bal
End bal
Overhead Applied Materials Handling
Overhead Applied: Quality Inspections
Beg ba
Beg ba
End. bal
End. ba
Overhead Applied: Machine Setups
Overhead Applied: Running Machines
Beg ba
Deg ba
End ba
End ba
Work in Process (WIP) Inventory Fabrication Department
Finished Goods Inventory
Beg ba
Beg ba
End ba
End ba](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59e1e845-820e-4fe9-add9-1fc4529c88f2%2F0a73a4f0-5134-480d-a9e1-04d88d6e11fe%2Fddd0hbn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required:
Use T-eccounts 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.
Wages Payable
Materials Inventory
Beg bal
Beg. bal
End. bal
End bal
Overhead Applied Materials Handling
Overhead Applied: Quality Inspections
Beg ba
Beg ba
End. bal
End. ba
Overhead Applied: Machine Setups
Overhead Applied: Running Machines
Beg ba
Deg ba
End ba
End ba
Work in Process (WIP) Inventory Fabrication Department
Finished Goods Inventory
Beg ba
Beg ba
End ba
End ba
![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:
Rate per
Activity Centers
Materials handling
Quality inspections
Machine setupa
Cost Drivers
Pounds of material handled
Number of inspectione
Munber of machine setupa
Cont Driver Unit
$ 36 per pound
$450 per inspection
$5,400 per setup
45 per hour
Running nachines
Number of nachine-hours
Direct materials costs were $600,000 and direct labor costs were $300,000 during July, when the Fabrication Department handled
3,000 pounds of materials, made 500 inspections, had 25 setups, and ran the machines for 10,000 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.
Materials Inventory
Wages Payable
Beg bal
Beg bal
End be
End ba
Overhead Applied Materials Handling
Overhead Applied Quality Inspections
Beg ba
Deg ba
End bal
End ba
Overhead Applled: Machine Setups
Overhead Applied: Running Machines
Beg ba
Beg ba
End ba
End ba
Work in Process (WIP) inventery Fabrication Department
Finished Goods Inventory](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59e1e845-820e-4fe9-add9-1fc4529c88f2%2F0a73a4f0-5134-480d-a9e1-04d88d6e11fe%2Fzcygmms_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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:
Rate per
Activity Centers
Materials handling
Quality inspections
Machine setupa
Cost Drivers
Pounds of material handled
Number of inspectione
Munber of machine setupa
Cont Driver Unit
$ 36 per pound
$450 per inspection
$5,400 per setup
45 per hour
Running nachines
Number of nachine-hours
Direct materials costs were $600,000 and direct labor costs were $300,000 during July, when the Fabrication Department handled
3,000 pounds of materials, made 500 inspections, had 25 setups, and ran the machines for 10,000 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.
Materials Inventory
Wages Payable
Beg bal
Beg bal
End be
End ba
Overhead Applied Materials Handling
Overhead Applied Quality Inspections
Beg ba
Deg ba
End bal
End ba
Overhead Applled: Machine Setups
Overhead Applied: Running Machines
Beg ba
Beg ba
End ba
End ba
Work in Process (WIP) inventery Fabrication Department
Finished Goods Inventory
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