Exercise 17-14 Activity-based costing LO P3 A2 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. Direct materials Direct labor Overhead (300% of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9,600 6,180 18,300 $34,000 10,400 ft. $ 3.27 Squared Edge Total $21,500 $ 31, 100 11,880 17,900 35,400 53,700 $68,700 $102,700 14, 100 ft. $ 4.87 Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $53,700 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 Cost Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total overhead $ 2,148 28, 680 22,872 $53,700 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.) Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Driver Direct Labor cost (5) Machine hours Setups (number) Rounded Edge $6,100 400 hours 31 times Usage Squared Edge $11,800 700 hours 95 times Total $17,900 1,100 hours 126 times Activity Rate Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhond Cost Activity Drivers Supervision Direct labor cost Depreciation of machinery Machine hours Assembly line preparation Setups % Activity rate Activity driver Incurred Overhead assigned % 0 Rounded edge Supervision Depreciation of machinery Assembly line preparation + 0 0 Squared edge Activity rate Activity driver incurred Overhead assigned % O 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