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 overheadGlassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,300 of overhead costs incurred by the twoproduct lines to see whether cost per foot would change markedly from that reported above. She has collected the followinginformation.Overhead Cost Category(Activity Cost Pool)SupervisionDepreciation of machineryAssembly line preparationSupervisionDepreciation of machineryAssembly line preparationRounded edgeSupervisionDepreciation of machineryAssembly line preparationCost$ 2,172Squared edgeComponents21,128$ 54,388She has also collected the following Information about the cost drivers for each category (cost pool) and the amount of each driverused by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.)SupervisionDepreciation of machineryAssembly line preparationDriverDirect labor cost ($)Machine hoursSetups (number)Required:1. Assign these three overhead cost pools to each of the two products using ABC.ActivityOverhead CostActivity DriversRounded Edge$ 9,70018,600$ 34,50018,400 ft.3.32Activity rateActivity rateSquared Edge$21,60011,900Total$31,30018,10035,78854,300$60,200 $183,780Direct labor costMachine hoursSetups2. Determine average coct per foot for each of the two products using ABC.14,288 ft.4.87Rounded Edge$6,200480 hours31 timesRounded edge Squared edgeSquared Edge$11,980Activity RateActivity driverIncurredUsageActivity driverIncurred788 hours95 timesTotal$18,18081,188 hours126 timesOverhead assignedOverhead assigned

Overhead or overhead costs are the costs of operating a business. Overheads are the indirect…

Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Overhead Cost Activity Drivers Supervision Depreciation of machinery Assembly line preparation Rounded edge Supervision Depreciation of machinery Assembly in preparation squared edge Components Supervision Depreciation of machinery Assembly line preparation Activity rate Activity rate Direct labor cost Machine hours 2. Determine average cost per foot for each of the two products using ABC. Rounded edge quared de Activity Rate Activity driver incurred Activity driver incurred Overhead assigned Overhead assigned

Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Overhead Cost Activity Drivers Supervision Depreciation of machinery Assembly line preparation Rounded edge Supervision Depreciation of machinery Assembly in preparation squared edge Components Supervision Depreciation of machinery Assembly line preparation Activity rate Activity rate Direct labor cost Machine hours 2. Determine average cost per foot for each of the two products using ABC. Rounded edge quared de Activity Rate Activity driver incurred Activity driver incurred Overhead assigned Overhead assigned

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Choose one option for each letter that describes each of the six transactions the best A. Direct and Indirect labor costs are incurred Direct and Indirect materials are issued Factory overhead is applied B. Direct and Indirect labor costs are incurred Direct and Indirect materials are issued Factory overhead is applied C. Direct and Indirect labor costs are incurred Direct and Indirect materials are issued Factory overhead is applied D. Completed goods are transferred to finished goods Goods are sold Underapplied overhead I allocated E. Completed goods are transferred to finished goods Goods are sold Underapplied overhead I allocated F. Completed goods are transferred to finished goods Goods are sold Underapplied overhead I allocated
! Required information [The following information applies to the questions displayed below.] For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.20 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the company's new LEC 90, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: Direct materials Direct labor…
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