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 | $ | 9,600 | $ | 21,400 | $ | 31,000 | |||||
Direct labor | 6,000 | 11,800 | 17,800 | ||||||||
Overhead (300% of direct labor cost) | 18,000 | 35,400 | 53,400 | ||||||||
Total cost | $ | 33,600 | $ | 68,600 | $ | 102,200 | |||||
Quantity produced | 10,400 | ft. | 14,200 | ft. | |||||||
Average cost per ft. (rounded) | $ | 3.23 | $ | 4.83 | |||||||
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) |
Cost | |||
Supervision | $ | 2,136 | ||
Depreciation of machinery | 28,520 | |||
Assembly line preparation | 22,744 | |||
Total overhead | $ | 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.)
Usage | ||||||||||
Overhead Cost Category (Activity Cost Pool) |
Driver | Rounded Edge | Squared Edge | Total | ||||||
Supervision | Direct labor cost ($) | $ | 6,000 | $ | 11,800 | $ | 17,800 | |||
Depreciation of machinery | Machine hours | 200 | hours | 700 | hours | 900 | hours | |||
Assembly line preparation | Setups (number) | 31 | times | 94 | times | 125 | times | |||
|
1. Assign these three overhead cost pools to each of the two products using ABC. | |||||||
Activity | Overhead Cost | Divided by | Activity Drivers | Activity Rate | |||
Supervision | 2,136 | / | $ 17,800 | Direct labor cost | 12.00% | ||
Depreciation of machinery | 28,520 | / | 900 | Machine hours | 31.69 | ||
Assembly line preparation | 22,744 | / | 125 | Setups | 181.95 | ||
Rounded edge | Activity rate | Multiply: | Activity driver incurred | Overhead assigned | |||
Supervision | 12.00% | x | $ 6,000 | Direct labor cost | $ 720 | ||
Depreciation of machinery | 31.69 | x | 200 | Machine hours | $ 6,338 | ||
Assembly line preparation | 181.95 | x | 31 | Setups | $ 5,640 | ||
Total overhead cost assigned to Rounded edge | $ 12,698 | ||||||
Squared edge | Activity rate | Multiply: | Activity driver incurred | Overhead assigned | |||
Supervision | 12.00% | x | $ 11,800 | Direct labor cost | $ 1,416 | ||
Depreciation of machinery | 31.69 | x | 700 | Machine hours | $ 22,183 | ||
Assembly line preparation | 181.95 | x | 94 | Setups | $ 17,103 | ||
Total overhead cost assigned to Rounded edge | $ 40,702 | ||||||
2. Determine average cost per foot for each of the two products using ABC. | |||||||
Rounded edge | Squared edge | ||||||
Direct materials | $ 9,600 | $ 21,400 | |||||
Direct labor | $ 6,000 | $ 11,800 | |||||
Overhead assigned | $ 12,698 | $ 40,702 | |||||
Total cost | $ 28,298 | $ 73,902 | |||||
Divided by: Quantity produced | 10,400 | 14,200 | |||||
Average cost per foot (rounded) | $ 2.72 | $ 5.20 |
Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same...
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 $ 9,300 $ 21,700 $ 31,000 Direct labor 6,000 11,800 17,800 Overhead (300% of direct labor cost) 18,000 35,400 53,400 Total cost $ 33,300 $ 68,900 $ 102,200 Quantity produced 10,300 ft. 14,200 ft. Average cost per ft. (rounded) $ 3.23 $ 4.85 Glassworks's controller...
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 $ 9,300 6.200 Direct materials Direct labor Overhead (300 of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) 18,600 $34,100 10,600 ft. Squared Edge Total $21.500 11.00 18.000 35,400 $103,100 14,100 ft. Glassworks's controller wishes to apply activity based costing (ABC) to allocate the $54,000 of...
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...
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 $ 9,600 6,200 18.600 $34,400 10,500 ft. $ 3.28 Squared Edge Total $21,500 $ 31,100 11,900 18,100 35,700 54,300 $69,100 $103,500 14,200 ft. $ 4.87 Glassworks's controller wishes to apply activity-based...
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 (382% of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9,500 6.100 18,388 $ 33,982 10,688 ft. $ 3.20 Squared Edge Total $ 21,500 $ 31,000 11,900 18,00 35.700 54,00 $ 69,182 $183,888 14,288 ft. $ 4.87 Glassworks's controller wishes...
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 $21,700 11,900 35,700 $69,300 Total Direct materials $9,400 31,100 17,900 53,700 Direct labor 6,000 Overhead (300% of direct labor cost) 18,000 $33,400 $102,700 Total cost 10,600 ft. $ 3.15 Quantity produced 14,100 ft 4.91 Average cost per ft. (rounded) Glassworks's controller wishes to apply activity-based costing (ABC) to...
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 ...... Direct labor ....... Overhead (300% of direct labor cost) .... Total cost. Quantity produced ...... Average cost per ft. (rounded) ......... $19,000 12,200 36,600 $67,800 10,500 ft. $ 6.46 $ 43,200 23,800 71,400 $138,400 14,100 ft. $ 9.82 $ 62,200 36,000 108,000 $206,200 Glassworks's...
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 $ 9,600 $ 21,600 $ 31,200 Direct labor 6,000 11,900 17,900 Overhead (300% of direct labor cost) 18,000 35,700 53,700 Total cost $ 33,600 $ 69,200 $ 102,800 Quantity produced 10,400 ft. 14,000 ft. Average cost per ft. (rounded) $ 3.23 $ 4.94 Glassworks's controller wishes to apply activity-based...
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 (300x of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Rounded Edge $ 9,600 6,100 18,309 534,000 10,700 ft. $ 3.18 Squared Edge Total $21,800 $ 31,400 11,900 18.000 35,700 54,000 569,400 $103, 400 14,200 ft. Glassworks's controller wishes to apply activity-based costing...
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 630, 900 $21,400 11.900 Direct materials Direct Labor Overhead (3001 or direct labor coat) Total cost Quantity produced Average cost per ft. (rounded) 633.500 6102.500 669.000 24.100 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...