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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Home Model Work Model Total Overhead Cost Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Overhead Assigned Required 5 Required 6 < Required 1 Required 7 Required 8 Required 2 >
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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Home Model Work Model Total Overhead Cost Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Overhead Assigned Required 5 Required 6 < Required 1 Required 7 Required 8 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text: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
Harbour has monthly overhead of $168,340, which is divided into the following activity pools:
Setup costs
Quality control
Maintenance
Total
Number of setups
Number of inspections
Number of machine hours
$86,400
54,940
27,000
$ 168,340
The company also has compiled the following information about the chosen cost drivers:
Home
37
340
1,600
Required 1
Home
Required 2 Required 3
$ 41
16
360
770 units
Work
71
330
1,100
Home Model
Work Model
Total Overhead Cost
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.
Complete this question by entering your answers in the tabs below.
Work
Total
108
670
2,700
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.
Overhead
Assigned
$ 64
38
579
330 units
< Required 1
Required 4 Required 5 Required 6
Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead
assigned to each product line.
Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.
Required 7
Required 2 >
Required 8
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