Check Glassworks Inc produces two types of glass sheving, rounded edge and squar
ID: 2546982 • Letter: C
Question
Check Glassworks Inc produces two types of glass sheving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data. 9,500 6,100 18,300 21,600,100 pirect materials Direot labor Overhead (300% of direct labor coat) Total cost Quantity produced Average cost per ft. (rounded 11,800 17,900 35,40053-700 68,800$102,700 33,900 14,200 fe Book Hint Print 10,600 ft 3.20 4.85 eences Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $53700 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 overhead Cost Category (Activity Cost Poo1) Supervision Depreciation of machinery Assenbly line preparation Total overhead Cont 2,148 28,680 22,872 53,700 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 actlivity rate and cost per unit answers to 2 decimal places)Explanation / Answer
ABC system Estimated cost Cost driver Cost per driver Supervision 2148 17900 12% Depreciation on machinery 28680 900 31.87 Assembly line preparation 22872 124 184.45 53700 Rounded edge Cost driver Total cost Supervision 12% 6100 732 Depreciation on machinery 31.87 300 9560 Assembly line preparation 184.45 30 5534 Total overheads 15826 Squared edge Cost driver Total cost Supervision 12% 11800 1416 Depreciation on machinery 31.87 600 19120 Assembly line preparation 184.45 94 17338 Total overheads 37874 Particulars Rounded edge Squared edge Total Direct material 9500 21600 31100 Direct labor 6100 11800 17900 Manufacturin overheads 15826 37874 53700 Total manufacturing cost 31426 71274 102700 Quantity produced 10600 14200 Average cost per ft 2.96 5.02