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. (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 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.)

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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 Home $ 74,880 58,500 29,700 $163,080 $ 44 17 368 Work $64 36 583 720 units 440 units Harbour has monthly overhead of $163,080, which is divided into the following cost pools: The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 39 57 96 Number of inspections 330 320 650 Number of machine hours 1,600 1,100 2,700 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.) 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 Home $ 74,880 58,500 29,700 $163,080 $ 44 17 368 Work $64 36 583 720 units 440 units Harbour has monthly overhead of $163,080, which is divided into the following cost pools: The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 39 57 96 Number of inspections 330 320 650 Number of machine hours 1,600 1,100 2,700 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.)

Answer rating: 100% (QA)

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