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: Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month Home $ 39 20 363 $ 63 39 569 340 units 670 units Harbour has monthly overhead of $205, 100, which is divided into the following cost pools $ 84,000 Setup costs Quality control Maintenance 65.000 56,100 Total $ 205,100 The company has also compiled the following information about the chosen cost drivers: Number of setups Number of inspections Number of machine hours Home Work 42 58 350 300 1,200 2.100 Total 100 650 3.300 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.) Home Model: Overhead Assigned 74,582 130,516 205,100 Work Model: Total Overhead 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing wystem (Round your Intermediate calculations and final answers to 2 decimal places) Unit Cost 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.) Home Work Gross Margin 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 Setups Quality Control Inspections Maintenance Machine Hours 5. Assuming an ABC system, assign Overhead costs to each product based on activity demands. Setup Costs Quality Control Maintenance Total Overhead Costs 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.) HomeWork Unit Cost 7. Calolate 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 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 8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Home Work Gross Margin (Traditional) Gross Margin (ABC) References eBook & Resources Problem Learning Objective: 04-01 Assign indirect costs to products or services using a single volume-based cost arver: PA4-3 Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 4-1, 4-3, 4-4, 4-6] Learning Objective: 04-03 Assign indirect costs to activity cost pools and select a cost driver for each pool