1 answer

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

Question:

Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information
2. Calculate the production cost per unit for each of Kellers products under a traditional costing system. (Round your inter
4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Keller wanted to implement an AB
6. Calculate the production cost per unit for each of Kellers products with an ABC system. (Round your intermediate calculat
8. Compare the gross margin per unit of each product under the traditional system and ABC. (Round your answers to 2 decimal p
Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Sandy Beach $19.00 Rocky River $ 27.40 17.30 106.e0 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 14.60 82.30 1,210 units 910 units Keller has monthly overhead of S11,716, which is divided into the following cost pools: $ 2,135 5,626 3,955 $ 11,716 Setup costs Quality control Maintenance Total The company has also compiled the following information about the chosen cost drivers: Total Rocky River Sandy Beach 14 35 21 Number of setups 485 325 Number of inspections Number of machine hours 160 1,75e 3,500 1,750
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.) Rocky River Sandy Beach 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.) Answer is not complete. Overhead Assigned To Rocky River Overhead Assigned To Sandy Beach 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 Unt 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.) Rocky Riven Sandy Beach Gross Margin (Traditional) Gross Margin (ABC)

Answers

total oh MH mh's % overhead
a b assinged
1) Sandy Beach Model 11,716 1,750 50% 5858
Rocky river model 11,716 1,750 50% 5858
total overhead costs 3,500
overhead assigned
Sandy Beach Model 5858
Rocky river model 5858
2) sandy rocky
Direct materials per unit 19.00 27.40
direct labor per unit 14.60 17.30
overhead per unit
sandy 4.84
Rocky 6.44
unit cost 38.44 51.14 answer
3) Gross margin
sandy rocky
Sales price per unit 82.3 106
unit product cost 38.44 51.14
Gross margin 43.86 54.86 answer
total cost activity rate cost driver
4) a b c=a/b
Setup costs 2,135 35 61 per setup
Quality control 5,626 485 11.6 per inspection
maintenance 3,955 3,500 1.13 per machin hour
5) overhead overhead
sandy rocky
Setup costs 854 1281
Quality control 1856 3770
maintenance 1977.5 1977.5
total 4687.5 7028.5
6) sandy rocky
Direct materials per unit 19.00 27.40
direct labor per unit 14.60 17.30
overhead per unit
sandy 3.87
Rocky 7.72
unit cost 37.47 52.42 answer
7) Gross margin
sandy rocky
Sales price per unit 82.3 106
unit product cost 37.47 52.42
Gross margin 44.83 53.58 answer
sandy rocky
8) Gross margin (Traditional) 43.86 54.86
Gross margin (ABC) 44.83 53.58
.

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