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. Rounded Edge Squared Edge Total Direct materials $ 9,300 $21,500 Direct labor $ 30,800 6,200 11,800 18,000 Overhead (3001 of direct labor cost) 18,600 35,400 54,000 Total cost $34,100 $68,700 $102,800 Quantity produced 10,500 ft. 14,000 ft. Average cost per ft. (rounded) $ 3.25 $ 4.91 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 Overhead Cost Category (Activity Cost Pool) Cost Supervision $ 2,160 Depreciation of machinery 28,840 Assembly Line preparation 23,000 Total overhead $54,000 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Usage Overhead Cost Category Activity Cost Pool) Supervision Depreciation of machinery Assembly Line preparation Driver Direct labor cost ($) Machine hours Setups (number) Rounded Edge Squared Edge $6,200 $11,800 300 hours 600 hours 30 times 93 times Total $18,000 900 hours 123 times Required: 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 Assembly line preparation Activity driver incurred Overhead assigned Activity rate Activity driver incurred Overhead assigned Squared edge Components Supervision Depreciation of machinery Assembly line preparation % 2. Determine average cost per foot for each of the two products using ABC. Rounded edge Squared edge