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 $ 35 $ 67 19 31 352 580 740 units 490 units Harbour has monthly overhead of $196,590, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 89,440 68,150 39,000 $196,590 The company has also compiled the following information about the chosen cost drivers: 104 Home Number of setups 38 Number of inspections 310 Number of machine hours 1,000 Work Total 66 415 725 1,600 2,600 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.) Overhead Assigned 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.) Overhead Assigned Home Model: 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.) Homo Work Unit Cost 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.) Home Work Gross Margin 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 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 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 on ABC system (Round your intermediate calculations and final answers to 2 decimal places.) Homo 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)
