Exercise 4-14 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 $ 9,309 6,209 18.689 $ 34,189 10,300 ft. $ 3.31 Squared Edge Total $ 21.6095 30.989 12,000 18,280 36,000 54,600 $ 69,600 $ 103,700 14,200 ft. $ 4.90 Glassworks's controller wishes to apply activity based costing (ABC) to allocate the $54,600 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) Supervision Depreciation of machinery Assembly line preparation Total overhead Cost $ 2.184 29,160 23, 256 $ 54,600 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 $5.200 300 hours 31 times Squared Edge $12,000 800 hours 93 times Total 518.200 900 hours 124 times Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Overhead Cost Activity Drivers Activity Rate Activity Supervision Depreciation of machinery Direct labor cost Machine hours Setups Assembly line preparation Activity driver Rounded edge Activity rate Over Overhead assigned Supervision Depreciation of machinery Assembly line preparation Activity driver Activity rate Overhead assigned incurred 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