Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work...

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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $44 Direct materials cost per unit Direct labor cost per unit Sales price per unit 17 362 30 575 430 units Expected production per month 770 units Harbour has monthly overhead of $167,440, which is divided into the following activity pools: Setup costs. $ 77,900 Quality control 57,640 31,900 Maintenance Total $ 167,440 The company also has compiled the following information about the chosen cost drivers: Total 95 655 2,900 Number of setups Number of inspections Number of machine hours Home 43 $ 63 310 1,400 Work 52 345 1,500 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 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. 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

Answer rating: 100% (QA)

Step 1 Determine the amount of overhead assigned to each product line under the traditional costing system using machine hours as the cost driver Calculate the overhead rate Overhead Rate Total Overhe View the full answer