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

	Home			Work
Direct materials cost per unit	$	41		$	63
Direct labor cost per unit		22			37
Sales price per unit		366			568
Expected production per month		750	units		460	units

Harbour has monthly overhead of $167,750, which is divided into the following cost pools:

Setup costs	$	70,200
Quality control		60,350
Maintenance		37,200
Total	$	167,750

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

	Home	Work	Total
Number of setups	36	54	90
Number of inspections	310	400	710
Number of machine hours	1,400	1,700	3,100

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.)

2.	Calculate the production cost per unit for each of Harbours products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

3.	Calculate Harbours gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

4.	Select the appropriate cost driver for each cost 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 Harbours products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)

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.)

8.	Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.)

Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work Direct materials cost per unit 41 63 Direct labor cost per unit 22 37 Sales price per unit 366 568 Expected production per month 750 units 460 units Harbour has monthly overhead of $167,750, which is divided into the following cost pools: 70,200 Setup costs Quality control 60,350 Maintenance 37,200 167,750 Total The company has also compiled the following information about the chosen cost drivers Home Work Total Number of setups 36 54 90 Number of inspections 310 400 710 Number of machine hours 1,400 1,700 3,100 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.) Answer is complete and correct Overhead Assigned V 75,758 Home Model 91,992 Work Model: 5 167,750 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.) Home Work Unit Cost