Question
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 | $71,100 | Number of moves | 3,000 | ||
Engineering | 105,300 | Number of change orders | 6,500 | ||
Other overhead | 238,500 | Direct labor hours | 45,000 |
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 | $20,800 | $17,200 | $3,000 | $0 | ||||
Direct materials | $6,900 | $8,600 | $11,400 | $9,800 | ||||
Direct labor cost | $850 | $1,000 | $1,640 | $110 |
Job 13-43 | Job 13-44 | Job 13-45 | Job 13-46 | |||||
Number of moves | 40 | 46 | 28 | 8 | ||||
Number of change orders | 31 | 44 | 18 | 18 | ||||
Direct labor hours | 850 | 1,000 | 1,640 | 110 |
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 |
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 | $ | $ | $ | $ |
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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