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 $18.80 14.10 83.20 1,240 units Rocky River $ 27.10 18.70 105.00 990 units Keller has monthly overhead of $10,424, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 2,480 5,060 2,884 $ 10, 424 The company has also compiled the following information about the chosen cost drivers: Number of setups Number of inspections Number of machine hours Sandy Beach 19 110 1,400 Rocky River 21 330 1,400 Total 40 440 2,800 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.) X Answer is complete but not entirely correct. Sandy Beach Model Rocky River Model Overhead Assigned $ 11,180 $ 11,180 $ 22,360 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.) X Answer is complete but not entirely correct. Sandy Beach Rocky River $ 44.32 X $ 58.65 x 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.) X Answer is complete but not entirely correct. Sandy Beach Rocky River Gross Margin $ 25.68 X $ 31.35 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.) X Answer is complete but not entirely correct. $ 130.00 X Setup Costs Quality Control Setups Inspections 25.00 Maintenance Machine Hours 2.20 X 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.) Answer is complete but not entirely correct. Setup Cost Quality Control Overhead Assigned Overhead Assigned To Sandy Beach To Rocky River $ 1,820 X $ 3,380 $ 3,500 X $ 7,500 X $ 3,080 X $ 3,080 Maintenance Total Overhead Cost $ 8,400 $ 13,960 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.) Answer is complete but not entirely correct. Sandy Beach Rocky River $ 42.00 X $ 61.54 x 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.) & Answer is complete but not entirely correct. Sandy Beach Rocky River Gross Margin $ 28.00 $ 28.46 8. Compare the gross margin per unit of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) X Answer is complete but not entirely correct. Sandy Beach Rocky River $ 25.68 X $ 31.35 Gross Margin (Traditional) Gross Margin (ABC) 28.00 X $ 28.46
