Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the currentperiod, the company reports the following dists.Direct materialsDirect laborOverhead (388% of direct labor cost)Total costQuantity producedAverage cost per ft. (rounded)Overhead Cost Category(Activity Cost Pool)SupervisionDepreciation of machineryAssembly line preparationTotal overheadOverhead Cost Category(Activity Cost Pool)SupervisionDepreciation of machineryAssembly line preparationSupervisionDepreciation of machineryAssembly line preparationGlassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,300 of overhead costs incurred by the twoproduct lines to see whether cost per foot would change markedly from that reported above. She has collected the followinginformation.Rounded edgeSupervisionDepreciation of machineryAssembly line preparationCost$ 2,172Squared edge|components23,128$54,300SupervisionDepreciation of machineryAssembly line preparationShe has also collected the following Information about the cost drivers for each category (cost pool) and the amount ofused by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.)DriverDirect labor cost ($)Machine hoursSetups (number)Required:1. Assign these three overhead cost pools to each of the two products using ABC.ActivityOverhead CostActivity Drivers%000Rounded Edge Squared Edge$ 9,700Activity rate18,600$34,50018,400 ft.$ 3.32Activity rate%1000$21,60011,90835,700$ 69,288Direct labor costMachine hoursSetups2. Determine average coct per foot for each of the two products using ABC.14,288 ft.4.87Rounded Edge$6,200Rounded edge Squared edge488 hours31 timesTotal$31,30018,10054,300$103,700Activity RateSquared Edge$11,000Activity driverIncurredUsageActivity driverIncurred788 hours95 timesTotal1,100 hours126 times$18,100Overhead assignedOverhead assigneddriver

Activity-based costing is a costing approach in which a company's activities are identified and the…

eriod, the company reports the following diets. Direct materials Direct labor Overhead (388% of direct labor cost) Total cost Quantity produced Average cost per ft. (rounded) Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total overhead Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Supervision Depreciation of machinery Assembly line preparation Rounded edge Supervision Depreciation of machinery Assembly line preparation Squared edge lessworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,300 of overhead costs incurred by the two roduct lines to see whether cost per foot would change markedly from that reported above. She has collected the following formation. Cost $ 2,172 29,808 23,128 $54,388 Components Supervision Depreciation of machinery Assembly line preparation Direct labor cast ($) Machine hours Setups (number) he has also collected the following Information about the cost drivers for each category (cost pool) and the amount of each driver sed by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers %0 D Rounded Edge $ 9,700 6,200 688 Activity rate $34,500 Activity rate 18,400 ft. %0 D 0 $ 3.32 Squared Edge $21,688 11,908 35,788 $60,200 Direct labor cost Machine hours Setups 2. Determine average cost per foot for each of the two products using ABC. Rounded edge 14,200 ft. 4.87 Rounded Edge $6,200 480 hours 31 times squared edge Total $ 31,300 18,180 54,380 $183,780 Activity Rate Squared Edge 788 hours 95 times Activity driver Incurred Usage Activity driver Incurred Total $18,188 1,188 hours 126 times Overhead assigned Overhead assigned

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q