1. Suppose Harbour 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 Harbours products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) 3. Calculate Harbours 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 Harbour wanted to implement an ABC system. 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. 6. Calculate the production cost per unit for each of Harbours products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) 7. Calculate Harbours gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) 8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.)

Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month Home 43 21 362 Work S 63 31 584 760 units 340 units Harbour has monthly overhead of $180,790, which is divided into the following cost pools Setup costs Quality control Maintenance $ 73,710 62,080 45,000 $180,790 Total The company has also compiled the following information about the chosen cost drivers Home Work Total 91 640 1,300 1,700 3,000 Number of setups Number of inspections Number of machine hours 43 320 48 320