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3 Exercise 17-17 Activity-based costing LO P3 2 points Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same
3 Exercise 17-17 Activity-based costing LO P3 2 points Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data. eBook Direct materials Direct labor Overhead (300% of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) ( Rounded Edge $ 19,000 12,200 36,600 $67,800 10,500 ft. $ 6.46 Squared Edge Total $ 43,200 $ 62,200 23,800 36,000 71,400 108,000 $ 138,400 $206,200 14,100 ft. $ 9.82 100 Hint Print Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $108,000 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information References Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total overhead Cost $ 5,400 56,600 46,000 $108,000 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Usage Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Driver Direct labor cost ($) Machine hours Setups (number) Rounded Edge $ 12,200 500 hours 40 times Squared Edge $ 23,800 1,500 hours 210 times Total $36,000 2,000 hours 250 times Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Antide on-hand cant Antii in nahn- A. Daha Mc Graw Hill Check my work Required: m. Activity Rate 2 points 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers Supervision $ 5,400 $ 12,200 Direct labor cost Depreciation of machinery 500 Machine hours Assembly line preparation 46,000 40 Setups 56,600 Rounded edge Activity rate Activity driver incurred Overhead assigned eBook % Supervision Depreciation of machinery Assembly line preparation 0 Hint 0 Print Squared edge Activity rate Activity driver incurred Overhead assigned 1% To References Components Supervision Depreciation of machinery Assembly line preparation 0 0 2. Determine average cost per foot for each of the two products using ABC. Rounded edge Squared edge Mc Graw Hill
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