Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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:

image text in transcribed

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: Rate per Cost Driver Unit 18 per pound $ 240 per inspection Activity Centers Materials handling Quality inspections Machine setups Cost Drivers Pounds of material handled $ Number of inspections Number of machine setups Number of machine-hours $3,000 per setup $20.00 per hour Running machines Direct materials costs were $318,000 and direct labor costs were $140,000 during July, when the Fabrication Department handled 3,900 pounds of materials, made 790 inspections, had 50 setups, and ran the machines for 17,000 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. End. bal. End. bal. Overhead Applied: Materials Handling Overhead Applied: Quality Inspections Beg. bal. Beg. bal. End. bal. End. bal. Overhead Applied: Machine Setups: Overhead Applied: Running Machines Beg. bal Beg. bal. End. bal. End. bal. Work in Process (WIP) Inventory Fabrication Department Finished Goods Inventory Beg. bal Beg. bal End. bal. End. bal.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting Information for Decision-Making and Strategy Execution

Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young

6th Edition

137024975, 978-0137024971

More Books

Students also viewed these Accounting questions

Question

Design a plan to research and select a new or used automobile.

Answered: 1 week ago

Question

Use z = a + bi and w = c + di to show that Z. W = Z.W.

Answered: 1 week ago

Question

Explain the importance of setting goals.

Answered: 1 week ago