Maurice Tutor

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    Argosy University/ Phoniex University/
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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 18 Aug 2017 My Price 7.00

roller skates

3. Vintage Fun reproduces old-fashioned style roller skates and skateboards. The annual production and sales of roller skates is 950 units, while 1,750 skateboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Roller skates require 2.5 direct labor hours per unit, while skateboards require 1.25 direct labor hours per unit. The total estimated overhead for the period is $114,300. The company is looking at the possibility of changing to an activity-based costing system for its products. If the company used an activity-based costing system, it would have the following three activity cost pools:

ACTIVITY COST POOL

ESTIMATED OVERHEAD COST

ROLLER SKATES

SKATEBOARDS

TOTAL

SETUP COSTS

$6550

375

280

655

ENGINEERING COSTS

$16500

450

650

1,100

MAINTENANCE COSTS

$91250

2375

2188

4563
         
                 

3a. What is the predetermined overhead allocation rate using the traditional costing system?

                 

3b. What is the overhead cost per skateboard using an activity-based costing system

 

Answers

Maurice Tutor
(5)
Status NEW Posted 18 Aug 2017 02:08 PM My Price 7.00

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