BV PA4-3 (Algo) Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 4-1, 4-3,4-4, 4-6 ] 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 Work $ 40 $ 68 25 35 362 572 660 units 340 units Harbour has monthly overhead of $194,830, which is divided into the following cost pools Setup costs Quality control Maintenance Total $ 78,120 70,810 45,900 $194,830 The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 39 54 93 Number of inspections 330 400 730 Number of machine hours 1,500 1,200 2,700 Required: 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 Mini e to search C Required: 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.) Home Model Overhead Assigned $ 108,240 $ 86,592 $ 194 832 Work Model Total Overhead Cost 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing system (Round your intermediate calculations and final answers to 2 decimal places.) Home Work 220 00 s 357 68 Unit Cost $ 3. Calculate Harbour's gross margin per unit for each product under the traditional costing system (Round your intermediate to search o WORK Surved 3. Calculate Harbour's gross margin per unit for each product under the traditional costing system (Round your intermediate calculations and final answers to 2 decimal places.) Work Home $ 14200 $ Gross Margin 214 32 4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Harbour wanted to implement an ABC system Setup Costs Quality Control Maintenance re to search ? 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned To Home Overhead Assigned To Work Setup Costs Quality Control Maintenance Total Overhead Cost $ 0 $ 0 6. Calculate the production cost per unit for each of Harbour's products in an ABC system (Round your intermediate calcu Homework Saved 7. Calculate Harbour's gross margin per unit for each product under an ABC system (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Gross Margin 8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Home Work Gross Margin (Traditional Gross Margin (ABC)
