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	$92,400		Number of moves	4,000
Engineering	93,600		Number of change orders	6,000
Other overhead	230,300		Direct labor hours	49,000

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	$23,900		$18,200		$2,000		$0
Direct materials	$5,400		$9,100		$10,200		$9,800
Direct labor cost	$880		$1,020		$1,560		$120

	Job 13-43		Job 13-44		Job 13-45		Job 13-46
Number of moves	47		53		31		6
Number of change orders	33		35		21		15
Direct labor hours	880		1,020		1,560		120

By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process.

. Calculate the activity rates for each of the three overhead activities. Round all activity rates to the nearest cent.

Materials handling rate
Engineering rate
Other overhead rate

2. Calculate the balance in Work in Process on July 31.

3. Calculate the cost of goods sold for July.

4. 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?