Question

Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Work Home $ 45 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 370 750 units 380 units Harbour has monthly overhead of $195,020, which is divided into the following cost pools: Setup costs Quality control Maintenance Total 78.960 60,960 55,100 195,020 $ The company has also compiled the following information about the chosen cost drivers: Home Work Total 55 Number of setups Number of inspections Number of machine hours 310 1,100 325635 1,800 2,900 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

Answer 1

	195020	/	2,900	=	67.24828
1)			overhead assigned
	Home Model		73973
	Work Model		121047
	total overhead cost		195020
2)			Home	Work
	Unit cost		158.63	418.54
3)			Home	Work
	Gross margin		211.37	149.46
4)
	Setups		840	per setup
	Quality control		96	per inspection
	Maintenance		19	per machine hour
			OH assigned	OH assigned
5)			to Home	to Work
	Setup costs		32760	46200
	Quality control		29760	31200
	Maintenance		20900	34200
	total overhead cost		83420	111600
6)			Home	Work
	Unit cost		171.23	393.68
7)			Home	Work
	Gross margin		198.77	174.32
			Home	work
8)	Gross margin(TRA)		211.37	149.46
	Gross margin(ABC)		198.77	174.32