1. Cost Management Systems: Activity-Based, Just-In-Time, and Quality Management
Chapter 19
Exercises

2. Activity Based Costing
In-Class Exercises (Form groups and work exercise):
Exercise No Page
E Handout Activity-Based Costing
(Use the format, as reflected on the next chart, to begin this exercise)

3. Activity Based Costing
Exercise 19-1
(See the next chart for the format to allocate costs)

4. Activity Based Costing
Prepare 1 chart for Rounded Edge and 1 chart for Squared Edge shelving.

5. Activity Based Costing
Exercise 21-2:
Pane Company produces two types of glass shelving on the same production line. The company reports the following overhead information Rounded Squared Edge Edge Total Overhead (300% of direct labor cost)…. $18, $35, $54,000
Exercise 19-1
Activity Cost Pool Cost
Supervision…………………………………… $ 2,160 Depreciation of machinery………………… ,840 Assembly line preparation………………… ,000 Total overhead……………………………….. $ 54,000
Cost Driver Information: Usage
Cost Category (ABC Pool) Driver Rounded Edge Squared Edge Total
Supervision……………..………..D/L cost $ 6, $11, $18,000
Depreciation of machinery…….Machine hrs hours hours ,000 hours
Assemble line preparation…....Setups (No.) times times times
(1) Assign overhead cost pools to each of the two products using ABC. (2) Determine the average cost per foot for each of the two products using ABC.

6. Activity Based Costing Calculation of Overhead Rates

7. Activity Based Costing
Exercise 19-1

8. Activity Based Costing Assignment of Costs - Rounded Edge Shelving

9. Activity Based Costing

10. Activity Based Costing Assignment of Costs - Squared Edge Shelving

11. Activity Based Costing
Cost Pool

12. Activity Based Costing Average Cost per Foot - Both Products

13. Activity Based Costing
Average cost per foot (current)…… $ $4.91

14. Activity Based Costing
End of Exercise