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Exercise 17-17 Activity-based costing LO P3 Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line For

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Exercise 17-17 Activity-based costing LO P3 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 $ 9,500 6,000 18.000 $ 33,500 10,500 ft. 5 3.19 Squared Edge Total $ 21,680 $ 31,100 12,000 18,000 36,000 54,000 $ 69,500 $103, 100 14.000 ft. 5 4.97 Glassworks's controller wishes to apply activity based costing (ABC) to allocate the $54,000 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 Cost Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total averhead 2,160 20,140 $56.000 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) Overtad cont category Cactivity Cost Pool Supervision Depreciation of machinery Assewoly Line preparation Dryer Direct labor cout (1) Machine hours Setups (number) Rounded te 56,000 20 hours Times Squared de $12,000 6 hours 95 les 515,000 100 hours 129 time Usage Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Driver Direct labor cost ($) Machine hours Setups (number) Rounded Edge $6,000 200 hours 30 times Squared Edge $12,000 600 hours 95 times Total $18,000 800 hours 125 times Activity Rate % Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers Supervision Direct labor cost Depreciation of machinery Machine hours Assembly line preparation Setups Rounded edge Activity rate Supervision % Depreciation of machinery 0 Assembly line preparation 0 Activity driver incurred Overhead assigned Activity rate Activity driver Incurred Overhead assigned Squared edge Components Supervision Depreciation of machinery Assembly line proporation %10 0 0 2. Determine average cost per foot for each of the two products uning ABC Rounded edge Squared edge

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