Managerial Accounting

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. Rounded Edge Squared Edge Total Direct materials $ 9,700 $21,400 $ 31,100 Direct labor 6,100 11,800 17,900 Overhead (300% of direct labor cost) 18,300 35,400 53,700 Total cost $34,100 $68,600 $102,700 Quantity produced 10,700 ft. 14,100 ft. Average cost per ft. (rounded) $ 3.19 $ 4.87 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) cm\" Supervision $ 2,148 Depreciation of machinery 28,680 Assembly line preparation 22,872 Total overhead $53,700 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Usage Overhead Cost Category (Activity Coat Pool) Driver Rounded Edge Squared Edge Total Supervision Direct labor cost ($) $5,100 $11,800 $17,900 Depreciation of machinery Machine hours 300 hours 700 hours 1,000 hours Assembly line preparation Setups (number) 31 times 94 times 125 times Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers Activity Rate Supervision Direct labor cost % Depreciation of machinery Machine hours Assembly line preparation Setups Rounded edge Activity rate Activity driver incurred Overhead assigned Supervision % Depreciation of machinery Assembly line preparation Squared edge Activity rate Activity driver incurred Overhead assigned 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