Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows:

	Home			Work
Direct materials cost per unit	$	37		$	67
Direct labor cost per unit		23			37
Sales price per unit		355			567
Expected production per month		720	units		490	units

Harbour has monthly overhead of $191,265, which is divided into the following cost pools:

Setup costs	$	85,140
Quality control		56,525
Maintenance		49,600
Total	$	191,265

The company has also compiled the following information about the chosen cost drivers:

	Home	Work	Total
Number of setups	44	55	99
Number of inspections	340	325	665
Number of machine hours	1,700	1,400	3,100

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 costs	$	$

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.)

	home	work
unit costs

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.)

	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 marginal (traditional)
gross marginal (ABC)