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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
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 Expected activity Activity cost pool Setup costs Engineering costs Maintenance costs Estimated overhead cost Roller Skates Skateboards Total 6,550 S16,500 450 $91.250 2,375 280 650 2,188 655 1,100 ,563 375 Sa, What is the predeternmined overhead allocation rate using the traditional costing system
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