Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information for the year is as follows: Activity Cost Driver Amount of Driver Materials handling $91,350 Number of moves 3,500 Engineering 120,900 Number of change orders 6,500 Other overhead 392,700 Direct labor hours 51,000 Heitger worked on four jobs in July. Data are as follows: Job 13-43 Job 13-44 Job 13-45 Job 13-46 Beginning balance $23,000 $18,700 $4,700 $0 Direct materials $5,300 $9,350 $13,100 $9,900 Direct labor cost $970 $1,050 $1,520 $100 Job 13-43 Job 13-44 Job 13-45 Job 13-46 Number of moves 41 53 28 6 Number of change orders 30 44 24 15 Direct labor hours 970 1,050 1,520 100 By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process. Required: 1. Calculate the activity rates for each of the three overhead activities. Round all activity rates to the nearest cent. Materials handling rate $fill in the blank 6544bd090057023_1 per move Engineering rate $fill in the blank 6544bd090057023_2 per change order Other overhead rate $fill in the blank 6544bd090057023_3 per direct labor hour 2. Prepare job-order cost sheets for each job showing all costs through July 31. When required, round your answers to the nearest dollar. If an amount is zero, enter "0". Heitger Company Job-Order Cost Sheets Job 13-43 Job 13-44 Job 13-45 Job 13-46 Balance, July 1 $fill in the blank 308f82057fdff96_1 $fill in the blank 308f82057fdff96_2 $fill in the blank 308f82057fdff96_3 $fill in the blank 308f82057fdff96_4 Direct materials fill in the blank 308f82057fdff96_5 fill in the blank 308f82057fdff96_6 fill in the blank 308f82057fdff96_7 fill in the blank 308f82057fdff96_8 Direct labor cost fill in the blank 308f82057fdff96_9 fill in the blank 308f82057fdff96_10 fill in the blank 308f82057fdff96_11 fill in the blank 308f82057fdff96_12 Materials handling fill in the blank 308f82057fdff96_13 fill in the blank 308f82057fdff96_14 fill in the blank 308f82057fdff96_15 fill in the blank 308f82057fdff96_16 Engineering fill in the blank 308f82057fdff96_17 fill in the blank 308f82057fdff96_18 fill in the blank 308f82057fdff96_19 fill in the blank 308f82057fdff96_20 Other overhead fill in the blank 308f82057fdff96_21 fill in the blank 308f82057fdff96_22 fill in the blank 308f82057fdff96_23 fill in the blank 308f82057fdff96_24 Total $fill in the blank 308f82057fdff96_25 $fill in the blank 308f82057fdff96_26 $fill in the blank 308f82057fdff96_27 $fill in the blank 308f82057fdff96_28 3. Calculate the balance in Work in Process on July 31. $fill in the blank 55736105f00f00f_1 4. Calculate the cost of goods sold for July. $fill in the blank 55736105f00f00f_2 5. What if Job 13-46 required no engineering change orders? What is the difference in the new cost of Job 13-46? $fill in the blank 55736105f00f00f_3 How would the cost of the other jobs be affected?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Heitger Company is a job-order costing firm that uses activity-based costing to apply
Activity | Cost | Driver | Amount of Driver | ||
Materials handling | $91,350 | Number of moves | 3,500 | ||
Engineering | 120,900 | Number of change orders | 6,500 | ||
Other overhead | 392,700 | Direct labor hours | 51,000 |
Heitger worked on four jobs in July. Data are as follows:
Job 13-43 | Job 13-44 | Job 13-45 | Job 13-46 | |||||
Beginning balance | $23,000 | $18,700 | $4,700 | $0 | ||||
Direct materials | $5,300 | $9,350 | $13,100 | $9,900 | ||||
Direct labor cost | $970 | $1,050 | $1,520 | $100 |
Job 13-43 | Job 13-44 | Job 13-45 | Job 13-46 | |||||
Number of moves | 41 | 53 | 28 | 6 | ||||
Number of change orders | 30 | 44 | 24 | 15 | ||||
Direct labor hours | 970 | 1,050 | 1,520 | 100 |
By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process.
Required:
1. Calculate the activity rates for each of the three overhead activities. Round all activity rates to the nearest cent.
Materials handling rate | $fill in the blank 6544bd090057023_1 per move |
Engineering rate | $fill in the blank 6544bd090057023_2 per change order |
Other overhead rate | $fill in the blank 6544bd090057023_3 per direct labor hour |
2. Prepare job-order cost sheets for each job showing all costs through July 31.
When required, round your answers to the nearest dollar. If an amount is zero, enter "0".
Heitger Company | ||||
Job-Order Cost Sheets | ||||
Job 13-43 | Job 13-44 | Job 13-45 | Job 13-46 | |
Balance, July 1 | $fill in the blank 308f82057fdff96_1 | $fill in the blank 308f82057fdff96_2 | $fill in the blank 308f82057fdff96_3 | $fill in the blank 308f82057fdff96_4 |
Direct materials | fill in the blank 308f82057fdff96_5 | fill in the blank 308f82057fdff96_6 | fill in the blank 308f82057fdff96_7 | fill in the blank 308f82057fdff96_8 |
Direct labor cost | fill in the blank 308f82057fdff96_9 | fill in the blank 308f82057fdff96_10 | fill in the blank 308f82057fdff96_11 | fill in the blank 308f82057fdff96_12 |
Materials handling | fill in the blank 308f82057fdff96_13 | fill in the blank 308f82057fdff96_14 | fill in the blank 308f82057fdff96_15 | fill in the blank 308f82057fdff96_16 |
Engineering | fill in the blank 308f82057fdff96_17 | fill in the blank 308f82057fdff96_18 | fill in the blank 308f82057fdff96_19 | fill in the blank 308f82057fdff96_20 |
Other overhead | fill in the blank 308f82057fdff96_21 | fill in the blank 308f82057fdff96_22 | fill in the blank 308f82057fdff96_23 | fill in the blank 308f82057fdff96_24 |
Total | $fill in the blank 308f82057fdff96_25 | $fill in the blank 308f82057fdff96_26 | $fill in the blank 308f82057fdff96_27 | $fill in the blank 308f82057fdff96_28 |
3. Calculate the balance in Work in Process on July 31.
$fill in the blank 55736105f00f00f_1
4. Calculate the cost of goods sold for July.
$fill in the blank 55736105f00f00f_2
5. What if Job 13-46 required no engineering change orders? What is the difference in the new
$fill in the blank 55736105f00f00f_3
How would the cost of the other jobs be affected?
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