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 (382% of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9,400 6,000 18,eee $ 33,488 19,480 . $ 3.21 Squared Edge $ 21,600 11,900 35,700 $ 69,280 14,000+ 4.94 Total $ 31,eee 17,988 53,700 $102,600 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 Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total overhead Cost $ 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.) 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,eee 300 hours 30 times Squared Edge $11,988 300 hours 93 times Total $17,900 1,100 hours 123 times 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 Activity Rate % Rounded edge Activity rate Activity driver incurred Overhead assigned HCU % 0 Supervision Depreciation of machinery Assembly line preparation 0 0 Activity rate Activity driver incurred Overhead assigned Squared edge Components Supervision Depreciation of machinery Assembly line preparation % 0 OOO 2. Determine average cost per foot for each of the two products using ABC. Rounded edge Squared edge
