Carolina Fashions, a shirt manufacturer, recently switched to activity-based costing from the department product costing method. The manager of Building S, which manufactures the shirts, has identified the following cost drivers and rates for overhead:

Activity Centers Cost Drivers Rate per Cost Driver Unit

Materials handling Yards of material handled $ 1.50 per yard

Quality inspections Number of inspections $ 110 per inspection

Machine setups Number of machine setups $ 700 per setup

Running machines Number of machine-hours $ 11 per hour.

Direct materials costs were $228,000 and direct labor costs were $98,000 during October, when Building S handled 41,100 yards of materials, made 900 inspections, had 110 setups, and ran the machines for 16,300 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. Use the accounts Materials Inventory, Wages Payable, Work-in-Process Inventory, Finished Goods Inventory, and four overhead applied accounts.