# 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 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)

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