ACTIVITY BASED COSTING, UNIT COST, ENDING WORK IN PROCESS INVENTORY, JOURNAL ENTRIES Smeyak Company uses an ABC system to apply overhead. There are three activity rates:
|
Purchasing |
$30 per purchase order |
|
Machining |
$5 per machine hour |
|
Other overhead |
60% of direct labor cost |
During August, Smeyak worked on three jobs. Data relating to these jobs follow:
|
Job 80 |
Job 81 |
Job 82 |
|
|
Units in each order |
110 |
400 |
100 |
|
Units sold |
— |
200 |
— |
|
Materials requisitioned |
$1,730 |
$3,000 |
$1,200 |
|
Direct labor cost |
$2,000 |
$4,600 |
$800 |
|
Machine hours |
60 |
40 |
20 |
|
Purchase orders |
20 |
16 |
25 |
During August, Jobs 80 and 82 were completed and transferred to finished goods inventory. Job 80 was sold by the end of the month. Job 81 was the only unfinished job at the end of the month.
Required:
1. Calculate the per unit cost of Jobs 80 and 82.
2. Compute the ending balance in the work in process inventory account.
3. Prepare the journal entries reflecting the completion of Jobs 80 and 82 and the sale of Job 80. The selling price is 140 percent of cost.