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Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate comCheck my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate comCheck my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate comCheck my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate com

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Answer #1
Solution 1:
Overhead Assigned (Traditional Costing)
Home model $96,640
Work model $72,480
Total overhead costs $169,120
Solution 2:
Computation of product cost per unit (Traditional)
Particulars Home Work
Direct material cost per unit $39.00 $63.00
Direct labor cost per unit $24.00 $30.00
Overhead cost per unit
Home - $96,640 / 750
Work - $72,480 / 420
$128.85 $172.57
Production cost per unit $191.85 $265.57
Solution 3:
Computation of Gross Margin per unit (Traditional)
Particulars Home Work
Selling price per unit $364.00 $576.00
Production cost per unit $191.85 $265.57
Gross Margin per unit $172.15 $310.43
Solution 4 & 5:
Computation of activity rate and Allocation of overhead to Products - ABC - Harbour
Activity Estimated Overhead Cost Activity Base Usage of Activity Base Activity Rate Home Work
Usage Allocated Costs Usage Allocated Costs
Setup costs $78,120.00 Nos of setups 93 $840.00 36 $30,240 57 $47,880
Quality control $54,600.00 Nos of inspections 650 $84.00 350 $29,400 300 $25,200
Maintenance $36,400.00 Machine hours 2800 $13.00 1600 $20,800 1200 $15,600
Total $169,120.00 $80,440.00 $88,680.00
Nos of units 750 420
Overhead cost per unit $107.25 $211.14
Solution 6:
Computation of product cost per unit - Harbour Company - ABC
Particulars Home Work
Direct material cost per unit $39.00 $63.00
Direct labor cost per unit $24.00 $30.00
Overhead cost per unit $107.25 $211.14
Production cost per unit $170.25 $304.14
Solution 7:
Computation of Gross Margin per unit - ABC
Particulars Home Work
Selling price per unit $364.00 $576.00
Production cost per unit $170.25 $304.14
Gross Margin per unit $193.75 $271.86
Solution 8:
Comparison of Gross Margin under traditional system and ABC
Particulars Home Work
Gross Margin ( Traditional) $172.15 $310.43
Gross Margin (ABC) $193.75 $271.86
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