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 reports the following data. Direct materials Direct labor Overhead (3008 of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9, 700 6.100 18,300 $34,100 10,300 ft. $ 3.31 Squared Edge Total $21,700 $ 31,400 11.900 18.000 35,700 54,000 $69,300 $103,400 14,000 ft. S 4.95 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 (retivity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total overhead Cost $ 2.160 28,840 23,000 $54.000 She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) tage Overhead Cost Category [notivity Coat Pool) Supervision Depreciation of machinery Assembly line preparation Driver Direct labor cost ($) Machine hours Setup (number) Rounded Edge $ 6, 100 200 hours 30 times Squared Edge $11,900 700 hours 93 times Total $18,000 900 hours 123 times Required:

Answer 1

Solutions:

УК AR Activity Supervision Depreciation of machinery Assembly line preparation Overhead Cost Activity Drivers $2,160 $18,000 Direct Labor Cost $28,840 900 Machine hours $23,000 123 Setups Activity Rate 12.00% of direct labor cost $32.04 Per hour $186.99 per setup Total $54,000 Computation of Overhead allocated Rounded Edge Activity Rate Activity driver Incurred $6,100 Supervision Depreciation of machinery Assembly line preparation 200 12% of direct labor cost $32.04 Per hour $186.99 per setup Total Overhead Assigned $732 $6,408 $5,610 $12,750 Squared Edge Activity Rate Activity driver Incurred $11,900 700 Supervision Depreciation of machinery Assembly line preparation 12% of direct labor cost $32.04 Per hour $186.99 per setup Total Overhead Assigned $1,428 $22,428 $17,390 $41,246 Computatioon of Avergae Cost per foot Rounded Edge Squared Edge Direct Material $9,700 $21,700 Direct labor $6,100 $11,900 Overhead Costs $12,750 $41,246 Total Costs Quantity produced Average cost per foot $28,550 10300 $2.77 $74,846 14000 $5.35 51 52 et696 Sheet302 (7) ) Sheet706 Sheet712 Sheet212 (3)