Harbour Company makes two models of electronic tablets, the Home and the Work. B
ID: 2420014 • Letter: H
Question
Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows:
Home
Work
Direct materials cost per unit
$
43
$
70
Direct labor cost per unit
17
38
Sales price per unit
350
578
Expected production per month
610
units
410
units
Harbour has monthly overhead of $182,750, which is divided into the following cost pools:
Setup costs
$
87,740
Quality control
61,410
Maintenance
33,600
Total
$
182,750
The company has also compiled the following information about the chosen cost drivers:
Home
Work
Total
Number of setups
36
71
107
Number of inspections
320
370
690
Number of machine hours
1,400
1,400
2,800
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.)
Overhead Assigned
Home Model
Work Model
Total Overhead Cost
2.
Calculate the production cost per unit for each of Harbour’s products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)
Home
Work
Unit Cost
3.
Calculate Harbour’s gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.)
Home
Work
Gross Margin
4.
Select the appropriate cost driver for each cost pool and calculate the activity rates if Harbour wanted to implement an ABC system.
Setup Costs
Quality Control
Maintenance
5.
Assuming an ABC system, assign overhead costs to each product based on activity demands.
Overhead Assigned To Home
Overhead Assigned to work
Setup Costs
Quality Control
Maintebabce
Total Overhead Cost
Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows:
Explanation / Answer
1)
2)
3
4)cost driver
set up -Number of set up - [87740 / 107 ]= $ 820 per set up
quality control -Number of inspection [61410 /690 ] = 89 per inspection
Maintenance -Number of machine hours = [ 33600/2800 ] = 12 per machine hour
5)
overhead assinged Home 91375 [182750*1400/2800] work 91375 Total overhead 182750Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.