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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

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 to apply activity-based costing (ABC) to allocate the $54,000 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 Overhead Cost Category (Activity Cost Pool) Supervision Depreciation of machinery Assembly line preparation Total overhead Cost $ 2,160 28,840 23,280 $ 54,800 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) Supervision Depreciation of machinery Assembly line preparation Driver Direct labor cost ($) Machine hours Setups (number) Rounded Edge $6,100 208 hours 31 times Squared Edge $11.988 700 hours 95 times Total $18.688 900 hours 126 times Activity Rate Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers Supervision Direct labor cost Depreciation of machinery Machine hours Assembly line preparation Setups Rounded edge Activity rate Activity driver Overhead assigned incurred Supervision Depreciation of machinery Assembly line preparation Squared edge Activity rate Activity driver incurred Overhead assigned Components Supervision Depreciation of machinery Assembly line preparation 2. Determine average cost per foot for each of the two products using ABC. Rounded edge Squared edge
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A B F 1 Activity Overhead Costs ($) Activity (A) drivers (B) direct labor 2,160 18,000 cost Activity rate (A/B) direct labor14 Squared Edged 15 Activity rate (A) Overhead Activity driver assigned (S) incurred (B) (A*B) 11,900 1,428 12% 32.04 700| 22A Overhead Costs Activity drivers ($) (A) (B) Activity rate (A/B) 1 Activity 2160 18000 direct labor cost =B2/C2 direct labor14 Squared Edged 15 Activity driver Activity rate (A) incurred (B) 11900 Overhead assigned ($) (A*B) =B17*017 =B9 =B10 700 =B

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