Question
Cornerstone Exercise 5.3 (Algorithmic) Job Costs Using Activity-Based Costing Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs.
Cornerstone Exercise 5.3 (Algorithmic) Job Costs Using Activity-Based Costing Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information for the year is as follows: Activity Cost Driver Amount of Driver Materials handling $48,200 Number of moves 2,000 Engineering 166,000 Number of change orders 10,000 Other overhead 262,200 Direct labor hours 46,000 Heitger worked on four jobs in July. Data are as follows: Job 13-43 Job 13-44 Job 13-45 Job 13-46 Beginning balance $20,400 $17,700 $4,100 $0 Direct materials $6,000 $8,850 $14,300 $12,000 Direct labor cost $890 $1,100 $1,680 $130 Job 13-43 Job 13-44 Job 13-45 Job 13-46 Number of moves 50 49 35 8 Number of change orders 27 41 15 20 Direct labor hours 890 1,100 1,680 130 By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process. Required: 1. Calculate the activity rates for each of the three overhead activities. Round all activity rates to the nearest cent. Materials handling rate $ per move Engineering rate $ per change order Other overhead rate $ per direct labor hour Hide Feedback Correct Check My Work Feedback 1. In job-order costing, departmental overhead rates and activity-based costing affect only the application of overhead which is put on the job-order costing sheet and must include all drivers for which overhead is applied. Hide 2. Prepare job-order cost sheets for each job showing all costs through July 31. When required, round your answers to the nearest dollar. If an amount is zero, enter "0". Heitger Company Job-Order Cost Sheets Job 13-43 Job 13-44 Job 13-45 Job 13-46 Balance, July 1 $ $ $ $ Direct materials Direct labor cost Materials handling Engineering Other overhead Total $ $ $ $ Hide Feedback Partially Correct Check My Work Feedback 2. The job-order cost sheet must include a unique number or name for this particular job, all direct costs, and all overhead costs associated with the job. 3. Calculate the balance in Work in Process on July 31. $ 4. Calculate the cost of goods sold for July. $ 5. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 13-46? $ How would the cost of the other jobs be affected?
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