Question

Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Direct m
Required: 1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of
3. Calculate Harbours gross margin per unit for each product under the traditional costing system. (Round your intermediate
5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned To Home Overhea
7. Calculate Harbours gross margin per unit for each product under an ABC system. (Round your intermediate calculations and
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Harbour
Answer 1 Home   Work Total Note
Machine Hours                          1,200.00          1,900.00           3,100.00 A
Total Manufacturing overhead      197,450.00 B
Predetermined OH Rate                63.69 C=B/A
Overhead assigned                        76,432.00     121,018.00 D=C*A
Workings for Answer 2 Home   Work Note
Overhead assigned                        76,432.00     121,018.00 See D
Units                             760.00             420.00 E
Overhead assigned per unit                             100.57             288.14 F=D/E
Answer 2 Home   Work
Direct Materials                                37.00               71.00
Direct Labor                                19.00               40.00
Allocated OH per unit                             100.57             288.14 See F
Unit cost                             156.57             399.14 G
Answer 3 Home   Work
Sell price                             354.00             570.00 H
Manufacturing cost per unit                             156.57             399.14 G
Gross margin per unit                             197.43             170.86 I=H-G
Answer 4
Activity cost pool Activity Measure
Setup costs Number of Setups
Quality Control Number of inspections
Maintenance Machine Hours
Workings for Answer 5
Calculation of ABC rates for overhead J K L=J/K
Activity cost pool Activity Measure Cost Activity usage ABC rates
Setup costs Number of Setups       80,360.00                98.00             820.00
Quality Control Number of inspections       64,390.00              685.00               94.00
Maintenance Machine Hours       52,700.00           3,100.00               17.00
Total Cost assigned     197,450.00
Answer 5
Home See L M N=M*L
Activity cost pool Activity Measure ABC Rates Activity used Cost assigned
Setup costs Number of Setups             820.00                35.00        28,700.00
Quality Control Number of inspections               94.00              340.00        31,960.00
Maintenance Machine Hours               17.00           1,200.00        20,400.00
Total Cost assigned       81,060.00
Work See L O P=L*O
Activity cost pool Activity Measure ABC Rates Activity used Cost assigned
Setup costs Number of Setups             820.00                63.00        51,660.00
Quality Control Number of inspections               94.00              345.00        32,430.00
Maintenance Machine Hours               17.00           1,900.00        32,300.00
Total Cost assigned     116,390.00
Workings for Answer 6 Home   Work Note
Overhead assigned                        81,060.00     116,390.00 Q= N,P
Units                             760.00             420.00 See E
Overhead assigned per unit                             106.66             277.12 R=Q/E
Answer 6 Home   Work
Direct Materials                                37.00               71.00
Direct Labor                                19.00               40.00
Allocated OH per unit                             106.66             277.12 See R
Unit cost
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