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Catalina Salls makes salls for small sailboats. It recently switched to activity-based costing from the department product costing method. The manager of Department Y, which
Catalina Salls makes salls 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 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 Rate per Cost Driver Unit $ 2.80 per yard $ 120 per inspection $1,eee per setup $ 10 per hour Direct materials costs were $242,000 and direct labor costs were $82,000 during October, when Department Y handled 44,500 yards of materials, made 800 Inspections, had 110 setups, and ran the machines for 16,600 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 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 Overhead Applied: Running Machines Beg. bal Beg. bal End. bal. End, bal. Work in Process (WIP) Inventory Department Y Finished Goods Inventory Beg. bal Beg. bal
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