Determine amount of overhead assigned to each product line

Assignment Help Accounting Basics

Reference no: EM132219772

Question - 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 $ 19.00 $ 27.50 Direct labor cost per unit 14.90 18.40 Sales price per unit 83.80 107.00 Expected production per month 1,230 units 930 units Keller has monthly overhead of $11,925, which is divided into the following cost pools: Setup costs $ 2,520 Quality control 5,742 Maintenance 3,663 Total $ 11,925 The company has also compiled the following information about the chosen cost drivers: Sand Beach Rocky River Total Number of setups 16 24 40 Number of inspections 200 295 495 Number of machine hours 1,650 1,650 3,300

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.)

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.)

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.)

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.)

Reference no: EM132219772

Questions Cloud

What was the hardest part about sifting through nutrition : Is this a reliable/credible source? If so, how do you know? OR Is this a non-credible source? If so, how do you know?

What is the value for variable costs : What is the value for variable costs when each firm is producing its optimum output?

Mindful of when going through grievance process : List three key points or best practices you must be mindful of when going through a grievance process with an employee.

Consider a hypothetical market for bottled water : Consider a hypothetical market for bottled water where the market demand and market supply equations are:

Determine amount of overhead assigned to each product line : Suppose Keller uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line

What do you think you would like most about working : What do you think you'd like most about working as a forensic scientist? Why? What do you think you'd like least about working as a forensic scientist?

The key components of the strategic management process : Explain the purpose and the key components of the strategic management process.

Summarize the ethical issue : Construction contracts bring up not only legal questions and considerations but ethical issues as well.

Record the effects of the transaction : For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts and determine ending account balances

User Account

All Pages