The company uses a perpetual inventory system and a job cost system in which each chalet is a job. The following events occurred during May: a. Purchased materials on account, $ 470,000.
b. Incurred total manufacturing wages of $119,000, which included both direct labor and indirect labor.

Used direct labor in manufacturing as follows:

Direct Labor
Chalet 13 $14,100
Chalet 14 $28,700
Chalet 15 $19,400
Chalet 16 $21,000

c. Requisitioned direct materials in manufacturing as follows:

Direct Materials
Chalet 13 $41,900
Chalet 14 $56,600
Chalet 15 $62,200
Chalet 16 $66,900

d. Depreciation of manufacturing equipment used on different chalets, $6,300.
e. Other overhead costs incurred on Chalets 13-16:

Equipment rentals paid in cash $10,100
Prepaid plant insurance expired $ 4,000

f. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost.
g. Chalets completed: 13, 15, and 16.
h. Chalets sold on account: 13 for $ 99,000 and 16 for $ 146,000.

Requirements:

1. Record the preceding events in the general journal.
2. Open T- accounts for Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero.
3. Summarize the job costs of the unfinished chalet and show that this equals the ending balance in Work in Process Inventory.
4. Summarize the job cost of the completed chalet that has not yet been sold and shows that this equals the ending balance in Finished Goods Inventory.
5. Compute the gross profit on each chalet that was sold. What costs must the gross profit cover for Steinborn Homes?

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?