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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 Setup costs Quality control Maintenance Total Harbour has monthly overhead of $177,540, which is divided into the following cost pools: Number of setups Number of inspections. Number of machine hours $ 79,790 62,550 35, 200 $177,540 Home Model: Work Model: Total Overhead Cost The company has also compiled the following information about the chosen cost drivers: Unit Cost Home Home 43 330 1,400 Gross Margin $ 40 23 $ 64 39 572 351 650 units 310 units 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 Work 58 365 1,800 Work Overhead Assigned 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 Work Total 101 695 3,200 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 Maintenance 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. 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.) Unit Cost Overhead Assigned To Home Home Gross Margin 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.) Work Home Work
5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Setup Costs Quality Control Maintenance Total Overhead Cost Unit 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 Gross Margin Overhead Assigned To Home 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.) Home Work Gross Margin (Traditional) Gross Margin (ABC) Overhead Assigned To Work Work 8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Home Work