Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager has estimated the following cost drivers and rates:

Activity Centers	Cost Drivers	Rate per Cost Driver Unit
Materials handling	Pounds of material handled	$	16	per pound
Quality inspections	Number of inspections	$	230	per inspection
Machine setups	Number of machine setups	$	2,900	per setup
Running machines	Number of machine-hours	$	23.00	per hour

Direct materials costs were $280,000 and direct labor costs were $158,000 during July, when the Fabrication Department handled 3,600 pounds of materials, made 730 inspections, had 50 setups, and ran the machines for 15,000 hours.

Required:

Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work-in-Process Inventory and out to Finished Goods Inventory.

Materials Inventory Wages Payable Beg. bal. Beg. bal. 280,000 Work in process Work in process End. bal 280,000 End, bal. Overhead Applied: Materials Handling Overhead Applied: Quality Inspections Beg. bal. Beg. bal Work in process Work in process End. bal. End, bal Overhead Applied: Machine Setups Overhead Applied: Running Machines Beg. bal Beg. bal Work in process Work in process End. bal End. bal. Finished Goods Inventory Beg. bal Work in process Work in Process (WIP) Inventory Fabrication Department Beg. bal Direct materials 280,000 Finished goods inventory Direct labor 158,000 Material handling OH Quality inspections OH Machine setup OH Running machines OH End. bal. 438,000 0 End, bal