Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please provide workings/steps so i can understand the question Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic

please provide workings/steps so i can understand the question

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Sandy Beach $19.10 Direct materials cost per unit Direct labor cost per unit Sales price per unit Rocky River $ 27.00 19.00 105.00 13.90 82.20 Expected production per month 1,190 units 990 units Keller has monthly overhead of $11,555, which is divided into the following cost pools: Setup costs $ 2,835 Quality control 5,520 3,200 Maintenance Total $ 11,555 The company has also compiled the following information about the chosen cost drivers: Sandy Beach Rocky River Total Number of setups 34 45 11 110 Number of inspections 350 460 Number of machine hours 1,600 1,600 3,200 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.) Overhead Assigned Sandy Beach Model Rocky River Model 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.) Sandy Beach Rocky River 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.) Sandy Beach Rocky River Gross Margin 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 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.) Sandy Beach Rocky River Gross Margin 8. Compare the gross margin per unit of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Sandy Beach Rocky River Gross Margin (Traditional) Gross Margin (ABC)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions