Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 $19.90 $ 28.10 Direct labor cost per unit 14.60 18.70 Sales price per unit 83.90 106.00 Expected production per month 1,240 units 970 units Keller has monthly overhead of $12,056, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 2,320 6,088 3,648 $ 12,056 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 Rocky River 19 21 200 295 1,600 1,600 Total 40 495 3,200 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.) 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 Assigned To Sandy Beach Overhead Assigned To Rocky River Setup Cost Quality Control Maintenance Total Overhead Cost 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started