Question
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 (300% of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9,400 6,100 18,300 $33,800 10,400 ft. S 3.25 11,900 35,700 $69,400 14,100 ft. $ 4.92 Squared Edge $21,800 Total $ 31,200 18,000 54,000 $103,200 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) Supervision Depreciation of machinery Assembly line preparation Total overhead Cost $ 2,160 28,840 23,000 $54,000 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Driver Direct labor cost ($) Machine hours Setups (number) Usage 300 hours 32 times Rounded Edge Squared Edge $6,100 $11,900 600 hours 94 times Total $18,000 900 hours 126 times
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