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Exercise 9-47 (Algo) Activity-Based Costing: Cost Flows through T-Accounts (LO 9-5, 7) LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost drivers and rates for overhead. The manufacturing facility at LaFontaine never has any work-in-process at the end of the month. Activity Centers General support Materials handling Machine setups Quality inspections Cost Drivers Number of machine-hours Direct materials cost Number of machine setups Number of inspections Rate per Cost Driver Unit $9 per machine-hour 8% of materials cost $ 4,670 per setup $ 93 per inspection Direct materials costs were $878,000 and direct labor costs were $863,000 during January, when the manufacturing facility made 750 inspections, had 36 setups, and ran the machines for 18,000 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 applied accounts. Materials Inventory Debit Credit Beginning Balance Ending Balance Wages Payable Debit Credit Beginning Balance Ending Balance

Exercise 9-47 (Algo) Activity-Based Costing: Cost Flows through T-Accounts (LO 9-5, 7) LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost drivers and rates for overhead. The manufacturing facility at LaFontaine never has any work-in-process at the end of the month. Activity Centers General support Materials handling Machine setups Quality inspections Cost Drivers Number of machine-hours Direct materials cost Number of machine setups Number of inspections Rate per Cost Driver Unit $9 per machine-hour 8% of materials cost $ 4,670 per setup $ 93 per inspection Direct materials costs were $878,000 and direct labor costs were $863,000 during January, when the manufacturing facility made 750 inspections, had 36 setups, and ran the machines for 18,000 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 applied accounts. Materials Inventory Debit Credit Beginning Balance Ending Balance Wages Payable Debit Credit Beginning Balance Ending Balance

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 13E: Friedman Company uses JIT manufacturing. There are several manufacturing cells set up within one of...
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Exercise 9-47 (Algo) Activity-Based Costing: Cost Flows through T-Accounts (LO 9-5, 7) LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost drivers and rates for overhead. The manufacturing facility at LaFontaine never has any work-in-process at the end of the month. Activity Centers General support Materials handling Machine setups Quality inspections Cost Drivers Number of machine-hours Direct materials cost Number of machine setups Number of inspections Rate per Cost Driver Unit $9 per machine-hour 8% of materials cost $ 4,670 per setup $ 93 per inspection Direct materials costs were $878,000 and direct labor costs were $863,000 during January, when the manufacturing facility made 750 inspections, had 36 setups, and ran the machines for 18,000 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 applied accounts. Materials Inventory Debit Credit Beginning Balance Ending Balance Wages Payable Debit Credit Beginning Balance Ending Balance
Transcribed Image Text:Exercise 9-47 (Algo) Activity-Based Costing: Cost Flows through T-Accounts (LO 9-5, 7) LaFontaine Accessories makes a variety of computer bags, carrier bags, and so on. LaFontaine uses activity-based costing for its products. The production manager has identified the following cost drivers and rates for overhead. The manufacturing facility at LaFontaine never has any work-in-process at the end of the month. Activity Centers General support Materials handling Machine setups Quality inspections Cost Drivers Number of machine-hours Direct materials cost Number of machine setups Number of inspections Rate per Cost Driver Unit $9 per machine-hour 8% of materials cost $ 4,670 per setup $ 93 per inspection Direct materials costs were $878,000 and direct labor costs were $863,000 during January, when the manufacturing facility made 750 inspections, had 36 setups, and ran the machines for 18,000 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 applied accounts. Materials Inventory Debit Credit Beginning Balance Ending Balance Wages Payable Debit Credit Beginning Balance Ending Balance
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