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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
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 Expected production per month Sales price per unit Home $ 38 17 357 Work $ 65 33 571 700 units 470 units Harbour has monthly overhead of $187,910, which is divided into the following activity pools: Setup costs Quality control Maintenance Total $ 89,250 64,860 33,800 $ 187,910 The company also has compiled the following information about the chosen cost drivers: Number of setups Number of inspections: Number of machine hours Required: Home 44 310 1,300 Work 61 380 1,300 Total 105 690 2,600 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. 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing system. 3. Calculate Harbour's gross margin per unit for each product under the traditional costing system. 4. Select the appropriate cost driver for each activity 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 Harbour's products in an ABC system. 7 Calculate Harhnur'e nrnee marain nor unit for each product under an ARC cuetam Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Overhead Assigned Home Model Work Model Total Overhead Cost $ 0 Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Calculate the production cost per unit for each of Harbour's products under a traditional costing system. Note: Round your intermediate calculations and final answers to 2 decimal places. Unit Cost Home Work Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Calculate Harbour's gross margin per unit for each product under the traditional costing system. Note: Round your intermediate calculations and final answers to 2 decimal places. Gross Margin Home Work Required 1 Required 2 Required 3 Required Required 5 Required 6 Required 7 Required 8 Select the appropriate cost driver for each activity pool and calculate the activity rates if Harbour wanted to implement an ABC system. Setup Costs Quality Control Maintenance Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Assuming an ABC system, assign overhead costs to each product based on activity demands. Setup Costs Overhead Assigned Overhead Assigned To Home To Work Quality Control Maintenance. Total Overhead Cost $ 0 $ 0 Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Calculate the production cost per unit for each of Harbour's products in an ABC system. Note: Round your intermediate calculations and final answers to 2 decimal places. Unit Cost Home Work Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Calculate Harbour's gross margin per unit for each product under an ABC system. Note: Round your intermediate calculations and final answers to 2 decimal places. Gross Margin Home Work Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Compare the gross margin of each product under the traditional system and ABC. Note: Round your answers to 2 decimal places. Gross Margin (Traditional) Gross Margin (ABC) Home Work
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