Question

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

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

2. Calculate the production cost per unit for each of Harbours products under a traditional costing system. (Round your inte

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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Answer #1
Required 1 :
Overhead assigned
Home model ( 189660*1200/2800 ) 81283
Work model ( 189660*1600/2800 ) 108377
Total overhead cost 189660
Required 2 :
Home Work
Direct materials cost per unit 38 67
Direct labor cost per unit 16 39
Overhead cost per unit [ Overhead assigned / Expected production per month ] 121.32 240.84
Unit cost 175.32 346.84
Required 3 :
Home Work
Sales price per unit 350 574
(-) Unit cost 175.32 346.84
Gross margin 174.68 227.16
Required 4 :
Setup costs ( 82840/109 ) 760 per setup
Quality control ( 59220/705 ) 84 per inspection
Maitenance ( 47600/2800 ) 17 per machine hour
Required 5 :
Overhead assigned to Home Overhead assigned to Work
Setup costs [ 760*Number of setups ] 28120 54720
Quality control [ 84*Number of inspections ] 27720 31500
Maintenance [ 17*Number of machine hours ] 20400 27200
Total overhead cost 76240 113420
Required 6 :
Home Work
Direct materials cost per unit 38 67
Direct labor cost per unit 16 39
Overhead cost per unit [ Overhead assigned / Expected production per month ] 113.79 252.04
Unit cost 167.79 358.04
Required 7 :
Home Work
Sales price per unit 350 574
(-) Unit cost 167.79 358.04
Gross margin 182.21 215.96
Required 8 :
Home Work
Gross margin (Traditional) 174.68 227.16
Gross margin (ABC) 182.21 215.96
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