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$ 91,300 Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $ 40 $ 6 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 17 32 363 574 620 units 330 units Harbour has monthly overhead of $186,075, which is divided into the following cost pools: Setup costs Quality control Maintenance 53,975 40, 800 $186,075 Total The company has also compiled the following information about the chosen cost drivers: Home Mork Total Number of setupa Number of inspections 38 72 110 330 305 635 Number of machine hours 1, 600 1,800 3,400 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.) Overhead Assigned Home Model: Work Model: Total Overhead Cost 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 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 Quality Control Maintenance

$ 91,300 Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $ 40 $ 6 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 17 32 363 574 620 units 330 units Harbour has monthly overhead of $186,075, which is divided into the following cost pools: Setup costs Quality control Maintenance 53,975 40, 800 $186,075 Total The company has also compiled the following information about the chosen cost drivers: Home Mork Total Number of setupa Number of inspections 38 72 110 330 305 635 Number of machine hours 1, 600 1,800 3,400 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.) Overhead Assigned Home Model: Work Model: Total Overhead Cost 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 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 Quality Control Maintenance

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $ 40 17 $ 66 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per nonth 32 363 574 620 units 330 units Harbour has monthly overhead of $186,075, which is divided into the following cost pools: $ 91,300 53,975 40,800 Setup costs Quality control Maintenance Total $186,075 The company has also compiled the following information about the chosen cost drivers: Work Total Home 38 Number of setups Number of inspections Number of machine hours 1,600 72 110 330 305 635 1,800 3,400 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.) Overhead Assigned Home Model: Work Model: Total Overhead Cost 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 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 Quality Control Maintenance 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned Overhead Assigned To Home To Work Setup Costs Quality Control Maintenance Total Overhead Cost
Transcribed Image Text:Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $ 40 17 $ 66 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per nonth 32 363 574 620 units 330 units Harbour has monthly overhead of $186,075, which is divided into the following cost pools: $ 91,300 53,975 40,800 Setup costs Quality control Maintenance Total $186,075 The company has also compiled the following information about the chosen cost drivers: Work Total Home 38 Number of setups Number of inspections Number of machine hours 1,600 72 110 330 305 635 1,800 3,400 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.) Overhead Assigned Home Model: Work Model: Total Overhead Cost 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 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 Quality Control Maintenance 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned Overhead Assigned To Home To Work Setup Costs Quality Control Maintenance Total Overhead Cost
5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned Overhead Assigned To Work To Home 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.) Home Work Unit Cost 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)
Transcribed Image Text:5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned Overhead Assigned To Work To Home 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.) Home Work Unit Cost 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)
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