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 $ 72,000 Number of moves 3,000 Engineering 165,000 Number of change orders 10,000 Other overhead 280,000 Direct labor hours 50,000 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 $20,300 $19,800 $2,300 $0 Direct materials $6,500 $8,900 $12,700 $9,800 Direct labor cost $18,000 $20,000 $32,000 $2,400 Job 13 43 Job 13 44 Job 13 45 Job 13 46 Number of moves 44 52 29 5 Number of change orders 30 40 20 20 Direct labor hours 900 1,000 1,600 120 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 Feedback 1 In job order costing, departmental overhead rates and activity based costing affect only the application of overhead and is put on the job order costing sheet and must include all drivers for which overhead is applied 2 Prepare job order cost sheets for each job showing all costs through July 31 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 $ $ $ $ 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 $ lower How would the cost of the other jobs be affected no effect

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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

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	$ 72,000	Number of moves	3,000
Engineering	165,000	Number of change orders	10,000
Other overhead	280,000	Direct labor hours	50,000

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	$20,300	$19,800	$2,300	$0
Direct materials	$6,500	$8,900	$12,700	$9,800
Direct labor cost	$18,000	$20,000	$32,000	$2,400

	Job 13-43	Job 13-44	Job 13-45	Job 13-46
Number of moves	44	52	29	5
Number of change orders	30	40	20	20
Direct labor hours	900	1,000	1,600	120

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

Feedback

1. In job-order costing, departmental overhead rates and activity-based costing affect only the application of overhead and is put on the job-order costing sheet and must include all drivers for which overhead is applied.

2. Prepare job-order cost sheets for each job showing all costs through July 31.

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	$	$	$	$

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?

$ lower

How would the cost of the other jobs be affected? no effect