#1 is not needed.

Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Sandy Beach Rocky River Direct materials cost per unit $20.10 $ 26.50 Direct labor 13.60 19.10 cost per unit Sales price per 82.40 unit 106.00 Expected production per 1,160 units 980 units month Keller has monthly overhead of $11,356, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 2,700 5,831 2,825 $11,356 The company has also compiled the following information about the chosen cost drivers: Sandy Rocky Total Beach River Number of setups 11 34 45 Number of 190 300 490 inspections Number of 1,250 machine hours 1,250 2,500 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.) Sandy Rocky River Beach Unit Cost $ 6,155.59 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.) Sandy Beach Rocky River Gross Margin 4. Select the appropriate cost driver for each cost pool and calculote 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.) Overhead Overhead Assigned Assigned To Sandy Beach To Rocky River Setup Cost Quality Control Maintenance 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.) Sandy Beach Rocky River 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.) Sandy Beach Rocky River 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.) Sandy Beach Rocky River Gross Margin (Traditional) Gross Margin (ABC)