Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work Direct materials cost per unit $39 $67 38 Direct labor cost per unit Sales price per unit. 18 350 566 Expected production per month 780 units 310 units Harbour has monthly overhead of $188,385, which is divided into the following activity pools: Setup costs Quality control $83,000 57, 785 47,600 Maintenance Total $ 188, 385 The company also has compiled the following information about the chosen cost drivers: Home Work Total Number of setups 39 61 100 Number of inspections 330 305 635 Number of machine hours. 1,400 2,000 3, 400 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. 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 AB 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 Harbour's gross margin per unit for each product under an ABC system. 8. Compare the gross margin of each product under the traditional system and ABC. Complete this question by entering your answers in the tabs below. 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 Required 2 > Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 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. Home Work Gross Margin Required 8 Required 1 Required 2 Required 3 Required 4 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 Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned Overhead Assigned To Work To Home Setup Costs Quality Control Maintenance Total Overhead Cost Required 8 Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 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. Home Work Unit Cost Required 7 Required 8 Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 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. Home Work Gross Margin Required 7 Compare the gross margin of each product under the traditional system and ABC. Note: Round your answers to 2 decimal places. Home Work Gross Margin (Traditional) Gross Margin (ABC)
