Question

Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month Sandy Beach $19.40 15.00 84.00 1,220 units Rocky River $ 27.90 17.60 105.00 990 units Keller has monthly overhead of $12,175, which is divided into the following cost pools: Setup costs Quality control Maintenance $ 2,850 5,580 3,745 $ 12,175 Total The company has also compiled the following information about the chosen cost drivers: Rocky River Total 35 50 Number of setups Number of inspections Number of machine hours Sandy Beach 15 200 1,750 265 1,750 465 3,500

Required:
1. Suppose Keller uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.)

Sandy Beach Model
Rocky River Model
Total Overhead Cost

2. Calculate the production cost per unit for each of Keller’s products under a traditional costing system.(Round your intermediate calculations and final answers to 2 decimal places.)

Unit Cost​:

3. Calculate Keller’s gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

Gross Margin:

4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Keller wanted to implement an ABC system. (Round your answers to 2 decimal places.)

Setup Costs
Quality Control
Maintenance

5. Assuming an ABC system, assign overhead costs to each product based on activity demands.(Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

Setup Costnot

Quality Controlnot

Maintenancenot

Total Overhead Cost

6. Calculate the production cost per unit for each of Keller’s products with an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)

Unit Cost​:

7. Calculate Keller’s gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)

Gross Margin:


8. Compare the gross margin per unit of each product under the traditional system and ABC. (Round your answers to 2 decimal places.)

Gross Margin (Traditional)
Gross Margin (ABC)

Answer 1

Doverhead Rate = Estimated ovestead/Estimated Machine hours & 12, 175/3,500 BAIF 3.47857) per machine hower overhead assigned 1750 x 3.47857) $ 6087,50 1750X3,47857 = $6087.50 sandy beach model Rocky River Total overhead assigned $12, 175 22 Disect material Dissect labor Sandy Beach Rocky River $19.40 $27.90 $15.00 $17.60 (6087.50/1,220) ($6089.50/990] $6.15 $39.39 $51.65 overhead assigned $4.99 Total unit cost

3) Sandy Beach Rocky River $84.00 Blo5,00 sales price less: Total unit cost $39.39 151.65 Gross margin $4u.bl $53.35 Set up cost Quality Control Activity driver Activity Rates No. of setups 2,850150 = $57 per set up No. of Inspections 5, 580/465=$12 per Irespection 3,745/3,500 =$1.07 pel Machine hours Machine hors Maintenance No. of Activity Rate = Estimated activity cost /tstimated activity driven α)0 Note: As per HomeworkLib policy Maximum upto u sub Posts to be answered please kindly post Remaining Parts separetly.