Catalina Sails makes sails for small sailboats. It recently switched to activity-based costing from the department product costing method. The manager of Department Y, which manufactures the sails, 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 $ 3 per yard Quality inspections Number of inspections $ 300 per inspection Machine setups Number of machine setups $ 2,400 per setup Running machines Number of machine-hours $ 30 per hour Direct materials costs were $550,000 and direct labor costs were $275,000 during October, when Department Y handled 20,000 yards of materials, made 400 inspections, had 50 setups, and ran the machines for 10,000 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.

Catalina Sails makes sails for small sailboats. It recently switched to activity-based costing from the department product costing method. The manager of Department Y, which manufactures the sails, has identified the following cost drivers and rates for overhead: Rate per Cost Driver Unit Activity Centers Materials handling Quality inspections Machine setups Running machines Cost Drivers Yards of material handled Number of inspections Number of machine setups Number of machine-hours S 3 per yard S 300 per inspection S2,400 per setup S 30 per hour Direct materials costs were $550,000 and direct labor costs were $275,000 during October, when Department Y handled 20,000 yards of materials, made 400 inspections, had 50 setups, and ran the machines for 10,000 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 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 Overhead Applied: Machine Setups d Applied: Running Machines Beg. bal Beg. bal End. bal End. bal Work in Process (WIP) Inventory Fabrication Department Finished Goods Inventory Beg. bal Beg. bal