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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 Sales price per unit Expected production per month Home Work $ 40 $ 62 24 39 368 567 720 units 340 units Harbour has monthly overhead of $195,680, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 79,310 64,170 52,200 $195,680 The company has also compiled the following information about the chosen cost drivers: Work Number of setups Number of inspections Number of machine hours Home 38 320 1,500 Total 103 690 2,900 370 1,400 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 X Maintenance This is a numeric cell, so please enter numbers only. Total Overhead Cost $ 6. Calculate the production cost per unit for each of Harbour's products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Unit Cost 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)
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