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 $ 9,400 6,100 18,300 $33,800 10,600 ft. $ 3.19 Squared Edge Total $21,500 $ 30,900 11,800 17,900 35, 400 53, 700 $68,700 $102,500 14,000 ft. $ 4.91 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.) 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 $6,100 200 hours 31 times Squared Edge $11,800 700 hours 94 times Total $17,900 900 hours 125 times Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers Activity Rate Direct labor cost % Supervision Depreciation of machinery Assembly line preparation Machine hours Setups Rounded edge Activity rate Activity driver incurred Overhead assigned % Supervision Depreciation of machinery Assembly line preparation Activity rate Activity driver incurred Overhead assigned Squared edge Components Supervision Depreciation of machinery 2. Determine average cost per foot for each of the two products using ABC. Rounded edge Squared edge