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Help Save & Exit Submis Exercise 17-14 Activity-based costing LO P3 A2 Glassworks Inc. produces two types of glass shelving, rounded edge and squared
Help Save & Exit Submis Exercise 17-14 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 Total cost Overhead (300% of direct labor cost) Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9,400 Squared Edge $21,500 Total $ 30,900 6,200 18,600 $34,200 10,300 ft. $ 3.32 $ 4.89 12,000 18,200 36,000 54,600 $69,500 $103,700 14,200 ft. 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 $54,600 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Overhead Cost Category (Activity Cost Pool)) Supervision Usage Driver Direct labor cost ($) Machine hours 300 hours Setups (number) 30 times Rounded Edge Squared Edge $6,200 $12,000 700 hours 95 times Total $18,200 1,000 hours 125 times. Depreciation of machinery Assembly line preparation Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Supervision Depreciation of machinery Assembly line preparation Rounded edge Supervision Depreciation of machinery Assembly line preparation Squared edge Components Overhead Cost Activity Drivers Activity Rate: Direct labor cost Machine hours % Setups Activity rate Activity driver incurred Overhead assigned % 0 0 0 Activity rate Activity driver incurred Overhead assigned Depreciation of machinery Assembly line preparation Rounded edge Supervision Depreciation of machinery Assembly line preparation Squared edge Components Saved DITOOLID givenchy Help Save & Exit Submit Machine hours Setups Activity rate Activity driver incurred Overhead assigned % 0 0 0 Supervision % 0 Depreciation of machinery 0 Assembly line preparation 0 Activity rate Activity driver incurred Overhead assigned 2. Determine average cost per foot for each of the two products using ABC. Rounded edge Squared edge
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