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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 cur

Required: 1.Assign these three overhead cost pools to each of the two products using ABC. Activity Activity Rate Overhead Cos

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 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) Supervision Depreciation of machinery Assembly line preparation Cost 2,148 28,680 22,872 $53,700 Total overhead 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 actlvity rate and cost per unit answers to 2 decimal places.) Usage Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Driver Rounded Edge Squared Edge $6,000 Total Direct labor cost ($) $11,900 $17,900 Machine hours 300 hours 600 hours 900 hours Setups (number) 31 times 95 times 126 times
Required: 1.Assign these three overhead cost pools to each of the two products using ABC. Activity Activity Rate Overhead Cost Activity Drivers Direct labor cost % Supervision Machine hours Depreciation of machinery Setups Assembly line preparation Activity driver Rounded edge Overhead assigned Activity rate incurred Supervision Depreciation of machinery Assembly line preparation Activity driver incurred Overhead assigned Activity rate Squared edge 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
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1. Assign these three overhead cost pools to each of the two products using ABC
Activity Overhead Cost

(a)
Activity Drivers

(b)
Activity Rates

(c = a / b)
   Supervision $2,148 $17,900 Direct labor cost 12.00% of direct labor cost
   Depreciation of machinery $28,680 900 Machine hours $31.87 per machine hour
   Assembly line preparation $22,872 126 Setups $181.52 per set up
Rounded Edge Activity Rate

(c)
Activity driver incurred

(d)
Overhead assigned

(c x d)
   Supervision 12.00% of direct labor cost $6,000 $720.00
   Depreciation of machinery $31.87 per machine hour 300 $9,561.00
   Assembly line preparation $181.52 per set up 31 $5,627.12
Total Overhead Cost $15,908.12
Squared Edge Activity Rate

(c)
Activity driver incurred

(d)
Overhead assigned

(c x d)
components
   Supervision 12.00% of direct labor cost $11,900 $1,428.00
   Depreciation of machinery $31.87 per machine hour 600 $19,122.00
   Assembly line preparation $181.52 per set up 95 $17,244.40
Total Overhead Cost $37,794.40
2. Determine average cost per foot for each of the two products using ABC.
Rounded Edge Squared Edge
Total direct material cost           (a) $9,400.00 $21,700.00
Total direct labor cost                (b) $6,000.00 $11,900.00
Total overhead cost (ABC)        (c) $15,908.12 $37,794.40
Total manufacturing cost        (d = a + b + c) $31,308.12 $71,394.40
Total production(feet)                (e) $10,600.00 $14,100.00
Average cost per foot               (d / e) $2.95 $5.06
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