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Exercise 17-14 Activity-based costing P3 A2 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 Squared Edge $19,000 $ 43,200 12,200 | 36.600 71.400 $67,800 $138,400 10.500 ft. 14,100 ft. $ 6.46 $ 9.82 Total S 62,200 36,000 108.000 $206,200 Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $108,000 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

Answer 1

The Question is based on ABC Costing & Conventional Costing Method Ans is attached below

Cost Dj Assignment og overhead Rounded I squared Istoo x 12200 36000 3,570 5700 y 23800] 1830 360° X Soo) 200x1500) [ 4 do 0 x 40 ] ( 16 po e x210] e 84,660 Supewision 5400 in [12200 : 23 000] Dep of a/c 14,150 42,450 56,600 in [Machine hours 500: 1500 Assembly dine 7,360 30,640 Prepalation 46000 in setup ( 40: 210] Total 23,340 (2) Average Cost Per foot Rounded Squared Edge Edge Total Direct Material 19,000 43,200 62,200 Direct Labour 12,2 uo 23,800 36,000 23,340 84,660 overhead 100000 [rout -1) (part-1) Total Cost 54, 540 1,51,660 206,200 Quantity Boduced 10,500 14,100 $5. 1992 $ 10.7560 Cost per foot [ ABC] 5.19 10.76 Cest Pell foot 6.46 9.82 Current Method] .94 1.27 Difference dowe Cost highe Cost in ABC) in ABC Difference in Cost exist because in ABC Method Cost is die basis driven but in Cwocont Metlua it allocated on Labour basis.