Solution-Show the flow of materials, labor, and overhead

Show the flow of materials, labor, and overhead costs

Reference no: EM132807383

Problem - 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	$17 per pound
Quality inspections	Number of inspections	$250 per inspection
Machine setups	Number of machine setups	$2,600 per setup
Running machines	Number of machine-hours	$23.00 per hour

Direct materials costs were $291000 and direct labor costs were $142,000 during July, when the Fabrication Department handled 3,600 pounds of materials. made "2'60 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.

Reference no: EM132807383

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Show the flow of materials, labor, and overhead costs

Reference no: EM132807383

Reference no: EM132807383

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