Sharp Glass is considering using Activity Based CostingBased on the Given Information:

1. Using the traditional method of costing (using Direct Labour Hours) calculate the total overhead allocated to each of glass and mirror departments (Hint: Calculate total direct labour hours first)

Complete both traditional method and ABC method

2. Using the ABC method of costing calculate the total overhead allocated to each of glass and mirror departments3. Comment on the difference between traditional and ABC methods

Transcribed Image Text:

Units produced Direct Labour Hours Equipment Setups Scrap Disposal Quality Control (per unit) # Setups Tons Inspections Glass 750 2.50 30 300 200 Mirror 500 7.50 50 500 500 Overhead Costs $ 70,000 $ 160,000 $ 175,000 S 405,000 Units produced Direct Labour Hours Equipment Setups Scrap Disposal Quality Control (per unit) # Setups Tons Inspections Glass 750 2.50 30 300 200 Mirror 500 7.50 50 500 500 Overhead Costs $ 70,000 $ 160,000 $ 175,000 S 405,000

Answer rating: 100% (QA)

1 Traditional Method Glass Department Overhead Costs 70000750 units x 500 units 160000300 setups x 7 ... View the full answer