Activity-Based Costing, Unit Cost, Ending Work-in-Process Inventory, Journal Entries

Feldspar Company uses an ABC system to apply overhead. There are three activity rates:

Setting up$25 per setupMachining$5.10 per machine hourOther overhead70% of direct labor cost

During September, Feldspar worked on three jobs. Data relating to these jobs follow:

Job 13-280Job 13-281Job 13-282Units in each order200520100Units sold200100Materials requisitioned$4,720$3,700$5,800Direct labor cost$2,000$4,600$800Machine hours8010040Number of setups201525

During September, Jobs 13-280 and 13-282 were completed and transferred to Finished Goods Inventory. Job 13-280 was sold by the end of the month. Job 13-281 was the only unfinished job at the end of the month.

Required:

1.Calculate the per-unit cost of Jobs 13-280 and 13-282. Round unit cost to nearest cent.

Job 13-280$per unitJob 13-282$per unit

2.Compute the ending balance in the work-in-process inventory account.

$

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3.Prepare the journal entries reflecting (a.) the completion of Jobs 13-280 and 13-282 and (b.) the sale of Job 13-280 on account. Make the entry to record the cost of Job 13-280 first, followed by the entry to record the revenue from its sale. The selling price is 150 percent of cost.

a.Finished Goods

Work in Process

b (1).Finished Goods

Work in Process

b (2).Accounts Receivable

Sales Revenue