Delta Parts, Inc., recently switched to activity-based costing from the department allocation method. The Fabrication Department manager
Question:
Delta Parts, Inc., recently switched to activity-based costing from the department allocation method. The Fabrication Department manager has estimated the following cost drivers and rates:
Direct materials costs were $300,000 and direct labor costs were $150,000 during July, when the Fabrication Department handled 3,750 pounds of materials, made 750 inspections, had 40 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. Use the accounts Materials Inventory, Wages Payable, Work-in-Process Inventory, Finished Goods Inventory, and four overhead appliedaccounts.
Step by Step Answer:
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher