ACTIVITY BASED COSTING, UNIT COST, ENDING WORK IN PROCESS INVENTORY Zavner Company is a job order costing firm that uses activity based costing to apply overhead to jobs. Zavner identified three overhead activities and related drivers. Budgeted information for the year is as follows:
|
Activity |
Cost |
Driver |
Amount of Driver |
|
Engineering design |
$120,000 |
Engineering hours |
3,000 |
|
Purchasing |
80,000 |
Number of parts |
10,000 |
|
Other overhead |
250,000 |
Direct labor hours |
40,000 |
Zavner worked on five jobs in July. Data are as follows:
|
Job 60 |
Job 61 |
Job 62 |
Job 63 |
Job 64 |
|
|
Balance, July 1 |
$32,450 |
$40,770 |
$29,090 |
$0 |
$0 |
|
Direct materials |
$26,000 |
$37,900 |
$25,350 |
$11,000 |
$13,560 |
|
Direct labor |
$40,000 |
$38,500 |
$43,000 |
$20,900 |
$18,000 |
|
Engineering hours |
20 |
10 |
15 |
100 |
200 |
|
Number of parts |
150 |
180 |
200 |
500 |
300 |
|
Direct labor hours |
2,500 |
2,400 |
2,600 |
1,200 |
1,100 |
By July 31, Jobs 60 and 62 were completed and sold. The remaining jobs were in process.
Required:
1. Calculate the activity rates for each of the three overhead activities.
2. Prepare job order cost sheets for each job showing all costs through July 31.
3. Calculate the balance in Work in Process on July 31.
4. Calculate cost of goods sold for July.