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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Setup costs Quality control Maintenance Total Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month Harbour has monthly overhead of $187,095, which is divided into the following activity pools: $ 83,740 64,155 39,200 $ 187,095 Number of setups Number of inspections Number of machine hours Home Home 42 330 1,400 $38 16 367 650 units The company also has compiled the following information about the chosen cost drivers: Work 64 375 1,400 Work Total 106 705 2,800 $ 62 39 574 300 units

Harbor Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Harbour has mointhly overhead of $187,095, which is divided into the following activity pools: The company also has compiled the following information about the chosen cost drivers: 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

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