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	$87,850		Number of moves	3,500
Engineering	123,200		Number of change orders	7,000
Other overhead	355,100		Direct labor hours	53,000

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	$23,500		$18,600		$2,600		$0
Direct materials	$6,500		$9,300		$11,900		$10,500
Direct labor cost	$870		$1,070		$1,610		$140

	Job 13-43		Job 13-44		Job 13-45		Job 13-46
Number of moves	50		46		32		7
Number of change orders	31		40		17		17
Direct labor hours	870		1,070		1,610		140

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	$fill in the blank 4b77c7f5607bffa_1 per move
Engineering rate	$fill in the blank 4b77c7f5607bffa_2 per change order
Other overhead rate	$fill in the blank 4b77c7f5607bffa_3 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.

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	$fill in the blank a6d7cf01001806d_1	$fill in the blank a6d7cf01001806d_2	$fill in the blank a6d7cf01001806d_3	$fill in the blank a6d7cf01001806d_4
Direct materials	fill in the blank a6d7cf01001806d_5	fill in the blank a6d7cf01001806d_6	fill in the blank a6d7cf01001806d_7	fill in the blank a6d7cf01001806d_8
Direct labor cost	fill in the blank a6d7cf01001806d_9	fill in the blank a6d7cf01001806d_10	fill in the blank a6d7cf01001806d_11	fill in the blank a6d7cf01001806d_12
Materials handling	fill in the blank a6d7cf01001806d_13	fill in the blank a6d7cf01001806d_14	fill in the blank a6d7cf01001806d_15	fill in the blank a6d7cf01001806d_16
Engineering	fill in the blank a6d7cf01001806d_17	fill in the blank a6d7cf01001806d_18	fill in the blank a6d7cf01001806d_19	fill in the blank a6d7cf01001806d_20
Other overhead	fill in the blank a6d7cf01001806d_21	fill in the blank a6d7cf01001806d_22	fill in the blank a6d7cf01001806d_23	fill in the blank a6d7cf01001806d_24
Total	$fill in the blank a6d7cf01001806d_25	$fill in the blank a6d7cf01001806d_26	$fill in the blank a6d7cf01001806d_27	$fill in the blank a6d7cf01001806d_28

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. $fill in the blank 5b9f9f02c00bff8_1

4. Calculate the cost of goods sold for July. $fill in the blank 5b9f9f02c00bff8_2

5. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 13-46?

$fill in the blank 5b9f9f02c00bff8_3 lower