3 2 points 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 setups Running machines Cost Drivers Pounds of material handled Number of inspections Cost Driver Unit $ 20 per pound $ 210 per inspection Number of machine setups Number of machine-hours $2,700 per setup $21.00 per hour eBook Print References Direct materials costs were $289,000 and direct labor costs were $130,000 during July, when the Fabrication Department handled 3,700 pounds of materials, made 710 inspections, had 50 setups, and ran the machines for 17,000 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 Beg. bal. End. bal. Wages Payable Beg. bal. 289,000 130,000 289,000 End. bal. 130,000 Overhead Applied: Quality Inspections Beg. bal. 74,000 149,100 Overhead Applied: Materials Handling Beg. bal. End. bal. 74,000 Overhead Applied: Machine Setups Beg. bal End. bal. End. bal. 149,100 Overhead Applied: Running Machines Beg. bal. 1,350,000 X 1,350,000 End. bal. 357,000 357,000 Work in Process (WIP) Inventory Fabrication Department Finished Goods Inventory Beg. bal Beg. bal Direct materials 289,000 1,134,100 Direct labor 130,000 Material handling OH 74,000 Quality inspections OH 149,100 Machine setup OH 135,000 Running machines OH 357,000 End. bal. 1,134,100 0 End. bal. 1,134,100