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	$20 per setup
Machining	$5.10 per machine hour
Other overhead	75% of direct labor cost

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

		Job 13-280		Job 13-281		Job 13-282
Units in each order		200		500		130
Units sold		200				130
Materials requisitioned		$4,720		$3,800		$5,800
Direct labor cost		$2,000		$4,700		$800
Machine hours		80		100		40
Number of setups		20		15		25

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:

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

Job 13-280	$fill in the blank 2d4c52fb4054054_1 per unit
Job 13-282	$fill in the blank 2d4c52fb4054054_2 per unit

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

$fill in the blank 2d4c52fb4054054_3

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1. Manufacturing cost comes from totaling direct materials, direct labor, and overhead on each job. The grand total can be divided by the number of units to determine per-unit cost. ABC system was used to apply Overhead.

2. Determine which jobs are still in work-in-process and compute the balance.

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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.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsOverhead ControlWork in ProcessFinished Goods	Finished Goods
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsOverhead ControlWork in ProcessWork in Process		Work in Process
b (1).	Accounts PayableCashCost of Goods SoldFinished GoodsMaterialsOverhead ControlWork in ProcessCost of Goods Sold	Cost of Goods Sold
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsOverhead ControlWork in ProcessFinished Goods		Finished Goods
b (2).	Accounts PayableAccounts ReceivableFinished GoodsMaterialsSales RevenueWork in ProcessAccounts Receivable	Accounts Receivable
	Accounts PayableAccounts ReceivableCost of Goods SoldMaterialsSales RevenueWork in ProcessSales Revenue		Sales Revenue

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3. The costs of a completed job are transferred from the work-in-process inventory account to the finished goods inventory account. When a job is sent to a customer, the cost of the finished job becomes the cost of the goods sold. Remember: two journal entries will show that the job was sold and billed to customer.