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

	Home			Work
Direct materials cost per unit	$	43		$	67
Direct labor cost per unit		20			35
Sales price per unit		359			571
Expected production per month		680	units		340	units

Harbour has monthly overhead of $182,780, which is divided into the following cost pools:

Setup costs	$	75,840
Quality control		59,340
Maintenance		47,600
Total	$	182,780

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

	Home	Work	Total
Number of setups	44	52	96
Number of inspections	310	380	690
Number of machine hours	1,300	1,500	2,800

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 Harbours products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)

	Home	Work
Unit Cost

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 Margin (Traditional)
Gross Margin (ABC)