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Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company
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 (300s of direct labor cost), Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge Squared Edge $ 9,500 $21,600 6,000 11,800 Total $ 31,100 17,800 18,000 $33,500 35,400 $68,800 53,400 $102,300 10,500 ft. $ 3.19 14,000 ft. $ 4.91 Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $53,400 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 $ 2,136 28,520 22,744 $53,400 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) overhead Cost Category (Activity Cost Pool). Supervision Depreciation of machinery Assembly line preparation Usage Driver Direct labor cost ($) Machine hours Rounded Edge $6,000 Squared Edge $11,000 Total $17,800 Setups (number) 400 hours 32 times 600 hours 95 times 1,000 hours 127 times Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Supervision Depreciation of machinery Assembly line preparation Rounded edge Activity Drivers Activity Rate Direct labor cost Machine hours Setups % Activity rate Activity driver incurred Overhead assigned < Prev 9 of 9 Next
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