Question
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
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 $ 18.30 $ 26.50
Direct labor cost per unit 13.50 17.40
Sales price per unit 82.40 105.00
Expected production per month 1,230 units 960 units
Keller has monthly overhead of $11,950, which is divided into the following cost pools:
Setup costs $ 2,790
Quality control 5,658
Maintenance 3,502
Total $ 11,950
The company has also compiled the following information about the chosen cost drivers:
Sandy Beach Rocky River Total
Number of setups 19 26 45
Number of inspections 130 330 460
Number of machine hours 1,700 1,700 3,400
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.)
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