Activity-Based Costing, Unit Cost, Ending Work-in-Process Inventory, Journal Entries

Feldspar Company uses an ABC system to apply overhead. There are three activity rates:

Setting up	$20 per setup
Machining	$5.10 per machine hour
Other overhead	80% of direct labor cost

During September, Feldspar worked on three jobs. Data relating to these jobs follow:

		Job 13-280		Job 13-281		Job 13-282
Units in each order		200		500		100
Units sold		200				100
Materials requisitioned		$4,730		$3,800		$5,600
Direct labor cost		$2,000		$4,600		$800
Machine hours		80		100		40
Number of setups		20		15		25

During September, Jobs 13-280 and 13-282 were completed and transferred to Finished Goods Inventory. Job 13-280 was sold by the end of the month. Job 13-281 was the only unfinished job at the end of the month.

Required:

1. Calculate the per-unit cost of Jobs 13-280 and 13-282. Round unit cost to nearest cent.

Job 13-280	$fill in the blank cc381d0a6ffd02f_1 per unit
Job 13-282	$fill in the blank cc381d0a6ffd02f_2 per unit

2. Compute the ending balance in the work-in-process inventory account.

$fill in the blank cc381d0a6ffd02f_3

Feedback

1. Manufacturing cost comes from totaling direct materials, direct labor, and overhead on each job. The grand total can be divided by the number of units to determine per-unit cost. ABC system was used to apply Overhead.

2. Determine which jobs are still in work-in-process and compute the balance.

3. Prepare the journal entries reflecting (a.) the completion of Jobs 13-280 and 13-282 and (b.) the sale of Job 13-280 on account. Make the entry to record the cost of Job 13-280 first, followed by the entry to record the revenue from its sale. The selling price is 150 percent of cost.

a.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsOverhead ControlWork in ProcessFinished Goods	Finished Goods
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsOverhead ControlWork in ProcessWork in Process		Work in Process
b (1).	Accounts PayableCashCost of Goods SoldFinished GoodsMaterialsOverhead ControlWork in ProcessCost of Goods Sold	Cost of Goods Sold
	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished GoodsOverhead ControlWork in ProcessFinished Goods		Finished Goods
b (2).	Accounts PayableAccounts ReceivableFinished GoodsMaterialsSales RevenueWork in ProcessAccounts Receivable	Accounts Receivable
	Accounts PayableAccounts ReceivableCost of Goods SoldMaterialsSales RevenueWork in ProcessSales Revenue		Sales Revenue