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?Suppose Keller uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Keller
?Suppose Keller uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.
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 $19.60 Rocky River $ 27.30 14.70 82.50 18.50 105.00 1,160 units 970 units Keller has monthly overhead of $11,364, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 2,440 5,908 3,016 $ 11,364 The company has also compiled the following information about the chosen cost drivers: Sandy Beach Rocky River Total Number of setups 10 Number of inspections 180 Number of machine hours 1,300 30 40 325 505 1,300 2,600
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