Because most of the parts for its irrigation systems are standard, Waterways handles the majority of its manufacturing as a process cost system. There are multiple process departments. Three of these departments are the Molding, Cutting, and Welding departments. All items eventually end up in the Package department which prepares items for sale in kits or individually. The following information is available for the Molding department for January:
Work in process beginning:
Units in process
22,000
Stage of completion for materials
80%
Stage of completion for labor and overhead
30%
Costs in work in process inventory:
Materials
$168,360
Labor
67,564
Overhead
17,270
Total costs in beginning work in process
$253,194
Units started into production in January
60,000
Units completed and transferred in January
58,000
Costs added to production:
Materials
$264,940
Labor
289,468
Overhead
60,578
Total cots added into production in January
$614,986
Work in process ending
Units in process
24,000
Stage of completion for materials
50%
Stage of completion for labor and overhead
10%
Instructions:
Prepare a production cost report for Waterways using the weighted-average method and then show the journal entry for transferring the units from Molding to the Cutting Department.

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?