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: ================================================== ACCT 346 Week 3 Homework Assignment
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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: ================================================== ACCT 346 Week 3 Homework Assignment
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1. Beginning WIP inventory is 15,500 units, 75 % complete for materials. During the month, 90,000 units were started; 87,000 were finished; and ending WIP was 18,500 units that were 50 % complete for materials.
How many equivalent units should be used to allocate costs for materials?( Assume that the weighted average method is used, not FIFO.)
2. During a period, 38,200 units were completed and 4,200 units were in ending WIP inventory. Ending WIP was 75 % complete for direct materials and 50 % complete for conversion costs.
2a. What are the equivalent units for direct materials?