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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

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

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 3CE: Lansing. Inc., provided the following data for its two producing departments: Machine hours are used...
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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 dists. 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 Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,300 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. Rounded edge Supervision Depreciation of machinery Assembly line preparation Cost $ 2,172 Squared edge |components 23,128 $54,300 Supervision Depreciation of machinery Assembly line preparation She has also collected the following Information about the cost drivers for each category (cost pool) and the amount of used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Driver Direct labor cost ($) Machine hours Setups (number) Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers %0 0 0 Rounded Edge Squared Edge $ 9,700 Activity rate 18,600 $34,500 18,400 ft. $ 3.32 Activity rate %10 0 0 $21,600 11,908 35,700 $ 69,288 Direct labor cost Machine hours Setups 2. Determine average coct per foot for each of the two products using ABC. 14,288 ft. 4.87 Rounded Edge $6,200 Rounded edge Squared edge 488 hours 31 times Total $31,300 18,100 54,300 $103,700 Activity Rate Squared Edge $11,000 Activity driver Incurred Usage Activity driver Incurred 788 hours 95 times Total 1,100 hours 126 times $18,100 Overhead assigned Overhead assigned driver
Transcribed Image Text: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 dists. 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 Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,300 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. Rounded edge Supervision Depreciation of machinery Assembly line preparation Cost $ 2,172 Squared edge |components 23,128 $54,300 Supervision Depreciation of machinery Assembly line preparation She has also collected the following Information about the cost drivers for each category (cost pool) and the amount of used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.) Driver Direct labor cost ($) Machine hours Setups (number) Required: 1. Assign these three overhead cost pools to each of the two products using ABC. Activity Overhead Cost Activity Drivers %0 0 0 Rounded Edge Squared Edge $ 9,700 Activity rate 18,600 $34,500 18,400 ft. $ 3.32 Activity rate %10 0 0 $21,600 11,908 35,700 $ 69,288 Direct labor cost Machine hours Setups 2. Determine average coct per foot for each of the two products using ABC. 14,288 ft. 4.87 Rounded Edge $6,200 Rounded edge Squared edge 488 hours 31 times Total $31,300 18,100 54,300 $103,700 Activity Rate Squared Edge $11,000 Activity driver Incurred Usage Activity driver Incurred 788 hours 95 times Total 1,100 hours 126 times $18,100 Overhead assigned Overhead assigned driver
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