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		$	66
Direct labor cost per unit		23			31
Sales price per unit		360			578
Expected production per month		720	units		490	units

Harbour has monthly overhead of $179,660, which is divided into the following cost pools:

Setup costs	$	70,840
Quality control		57,620
Maintenance		51,200
Total	$	179,660

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

	Home	Work	Total
Number of setups	40	52	92
Number of inspections	340	330	670
Number of machine hours	1,700	1,500	3,200

Required: 1(a) 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.)

1(b) 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.)

1(c) 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.)

2(a) Select the appropriate cost driver for each cost pool and calculate the activity rates if Harbour wanted to implement an ABC system.

2(b) Assuming an ABC system, assign overhead costs to each product based on activity demands.

2(c) 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.)

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

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