Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows:

Keller has monthly overhead of $11,466, which is divided into the following cost pools:

	Sandy Beach			Rocky River
Direct materials cost per unit	$	18.20		$	26.30
Direct labor cost per unit		13.20			18.40
Sales price per unit		83.50			105.00
Expected production per month		1,180	units		930	units

Setup costs	$	2,170
Quality control		6,254
Maintenance		3,042
Total	$	11,466

	Sandy Beach	Rocky River	Total
Number of setups	19	16	35
Number of inspections	170	360	530
Number of machine hours	1,300	1,300	2,600

	overhead assigned
sandy beach	?
rocky river model	?
total overhead cost	?

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

Unit cost Sandy beach ? Rocky river ?

3) Calculate Kellers gross margin per unit for each product under the traditional costing system.

PA4-4 (Algo) Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 4-1, 4-3, 4-4, 4-6] Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Keller has monthly overhead of $11,466, which is divided into the following cost pools: The company has also compiled the following information about the chosen cost drivers: 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.) 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.) 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.) 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.) 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.) 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.) 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.) 8. Compare the gross margin per unit of each product under the traditional system and ABC. (Round your answers to 2 decimal places.)