Given Data PA04-04: Basic Production Information: Direct materials cost per unit S KELLER COMPANY Sandy Beach Rocky River 20 $ 28 Direct labor cost per unit S 15 $ Sales price per unit $ 70 $ Expected production per month (units) 1,200 960 19 90 Overhead cost pools: Setup costs 5,200 Quality control 11,000 Maintenance 6,160 5 Total monthly overhead S 22.360 6 7 Cost drivers: Sandy Beach Rocky River Total 8 Number of setups 14 26 40 9 Number of inspections 0 Number of machine hours 140 1,400 300 440 1,400 2,800 21 22 Requirements 23 24 25 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 2. Calculate the production cost per unit for each of Keller's products under a traditional costing system 26 27 3. Calculate Keller's gross margin per unit for each product under the traditional costing system. 28 29 4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Keller wanted to implement an ABC system. 30 31 5. Assuming an ABC system, assign overhead costs to each product based on activity demands 32 33 6. Calculate the production cost per unit for each of Keller's products with an ABC system 34 35 7. Calculate Keller's gross margin per unit for each product under an ABC system. 36 37 8. Compare the gross margin of each product under the traditional system and ABC 38