PA4-3 (Algo) Selecting Cost Drivers, Assigning Costs Using Activity Rates [L0 4-1, 4-3, 4-4, 4-6] Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work Direct materials cost per unit $ 43 $ 69 Direct labor cost per unit 24 39 Sales price per unit 364 568 Expected production per month 759 units 429 units Harbour has monthly overhead of $197,865, which is divided into the following cost pools: Setup costs $ 89,649 Quality control 56,925 Maintenance 52,299 Total $197,865 The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 38 79 198 Number of inspections 339 345 675 Number of machine hours 1,299 1,799 2,999 l 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.) 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.) 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.) -- 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 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. 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.) 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.) -- 8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Gross Margin (Traditional) - ) Gross Margin (ABC