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

	Home			Work
Direct materials cost per unit	$	43		$	66
Direct labor cost per unit		15			32
Sales price per unit		355			574
Expected production per month		740	units		370	units

Harbour has monthly overhead of $190,460, which is divided into the following cost pools:

Setup costs	$	76,760
Quality control		56,700
Maintenance		57,000
Total	$	190,460

The company has also compiled the following information about the chosen cost drivers:

	Home	Work	Total
Number of setups	38	63	101
Number of inspections	320	380	700
Number of machine hours	1,100	1,900	3,000

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.)

Assuming an ABC system, assign overhead costs to each product based on activity demands.

	overhead assigned to home	overhead assigned to work
Setup costs
quality control
maintenance
total overhead cost

. Calculate the production cost per unit for each of Harbours products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)

	Home	Work
Unit Cost

. Calculate Harbours 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 TRADITYINAL
Gross Margin ABC

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