account .
Production records show that there were 400 units in the beginning inventory , 30 % complete , 1,600 units started , and 1,700 units transferred out . The beginning work in process had materials cost of $ 2,040 and conversion costs of $ 1,550 . The units in ending inventory were 40 % complete . Materials are entered at the beginning of the painting process .
How many units are in process at May 31 ? What is the unit materials cost for May ? What is the unit conversion cost for May ? What is the total cost of units transferred out in May ? What is the cost of the May 31 inventory ? Exercise 17-1
Saddle Inc . has two types of handbags : standard and custom . The controller has decided to use a plantwide overhead rate based on direct labor costs . The president has heard of activity-based costing and wants to see how the results would differ if this system were used . Two activity cost pools were developed : machining and machine setup . Presented below is information related to the company ’ s operations .
Total estimated overhead costs are $ 240,000 . Overhead cost allocated to the machining activity cost pool is $ 140,000 , and $ 100,000 is allocated to the machine setup activity cost pool .
Compute the overhead rate using the traditional ( plantwide ) approach .
Compute the overhead rates using the activity-based costing approach .