PA4-3 Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 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:HomeWorkDirect materials cost per unit$41$63Direct labor cost per unit2237Sales price per unit366568Expected production per month750units460unitsHarbour has monthly overhead of $167,750, which is divided into the following cost pools:Setup costs$70,200Quality control60,350Maintenance37,200Total$167,750The company has also compiled the following information about the chosen cost drivers:HomeWorkTotalNumber of setups365490Number of inspections310400710Number of machine hours1,4001,7003,100Required: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.)

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.

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.)

3 value: ' 10.00 points PA43 Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 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 $ 41 S 5.3 Direct labor cost per unit 22 3? Sales price per unit 365 563 Expected production per month T50 units 450 units Harbour has montth overhead oi $167,150, which is divided into the following cost pools: Setup costs $ 70,200 Quality control 60,350 Maintenance 3?,200 Total $167,750 The companyr has also mmpi led the following information about the chosen cost drivers: Home new Total Number ot setups 36 54 90 Number of inspections 310 400 7'1 0 Number of machine houm 1,400 1,?00 3,100 Required: 1. Suppose Harbour uses a traditional costing system with machine houm as the cost driver. Determine the amount of overhead assigned to each product line. {Do not round inten'nadiat: calculations.) Home Model: Work Model: 'i'iiial'iiir'r'heaci ' \"- Ccst I $ 0 9 2. Calculate the production coat per unit for each of Harbour's prod ucta under a traditional coating system. [Round your Intermediate calculations and nal answers to 2 decimal places] Unit Coal 3. Calculate Harbou r'e gripes margin per unit for each product under the traditional coating system. [Round your intermediate calculations and nal answer: to 2 decimal places.) 4. Select the appropriate coat driver for each ccct pool and calculate the activity rates if Harbourwanted to implement an ABC ayetem. W... Quality Central Maintenance 5. Assuming an ABC system, assign curerhead costs to each product based on activity demands. Setup Costs Quality Control Total Overhead Cost E. Calculate the production cost per unit for each of Harbour's products in an ABC system. [Round your Intermediate calculations and nal 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 nal answers to- 2 decimal places.]