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 Cost Driver Unit 17 per pound $ 220 per inspection $2,900 per setup $22.00 per hour Cost Drivers Activity Centers Materials handling Quality inspections Machine setups Running machines Pounds of material handled Number of inspections Number of machine setups Number of machine-hours Direct materials costs were $306,000 and direct labor costs were $154,000 during July, when the Fabrication Department handled 3,900 pounds of materials, made 700 inspections, had 40 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. Materials Inventory Wages Payable Beg. bal. Beg. bal. End. bal. End. bal. Overhead Applied: Materials Handling Overhead Applied: Quality Inspections Beg. bal. Beg. bal. End, bal, End. bal.

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 Cost Driver Unit 17 per pound $ 220 per inspection $2,900 per setup $22.00 per hour Cost Drivers Activity Centers Materials handling Quality inspections Machine setups Running machines Pounds of material handled Number of inspections Number of machine setups Number of machine-hours Direct materials costs were $306,000 and direct labor costs were $154,000 during July, when the Fabrication Department handled 3,900 pounds of materials, made 700 inspections, had 40 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. Materials Inventory Wages Payable Beg. bal. Beg. bal. End. bal. End. bal. Overhead Applied: Materials Handling Overhead Applied: Quality Inspections Beg. bal. Beg. bal. End, bal, End. bal.

Name: Southwest Components recently switched to activity-based costing from
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Description: Southwest Components recently switched to activity-based costing from the department allocation method. The FabricationDepartment manager has estimated the following cost drivers and rates:Rate perCost Driver UnitActivity CentersMaterials handlingQu

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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