3.4 Connect: Cases and Problems Assignment
Tonio12070514
3.4.9manfin.docxPA4-3 (Algo) Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 4-1, 4-3, 4-4, 4-6 ]
Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows:
|
|
Home |
Work |
||||
|
Direct materials cost per unit |
$ |
36 |
|
$ |
64 |
|
|
Direct labor cost per unit |
|
23 |
|
|
40 |
|
|
Sales price per unit |
|
357 |
|
|
566 |
|
|
Expected production per month |
|
680 |
units |
|
490 |
units |
|
|
Harbour has monthly overhead of $185,900, which is divided into the following cost pools:
|
|
|
|
|
Setup costs |
$ |
77,600 |
|
Quality control |
|
69,300 |
|
Maintenance |
|
39,000 |
|
Total |
$ |
185,900 |
|
|
The company has also compiled the following information about the chosen cost drivers:
|
|
Home |
Work |
Total |
|
Number of setups |
36 |
61 |
97 |
|
Number of inspections |
330 |
370 |
700 |
|
Number of machine hours |
1,100 |
1,500 |
2,600 |
|
|
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 |
$ |
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 |
|
Unit cost |
|
|
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 cost |
|
|
|
Quality Control |
|
|
|
Maintenance |
|
|
|
Total overhead Cost |
$ |
$ |
6. Calculate the production cost per unit for each of Harbour’s products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)
|
|
Home |
Work |
|
Unit Cost |
|
|
7. Calculate Harbour’s gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.)
|
|
Home |
Work |
|
Gross Margin |
|
|
8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.)
|
|
Home |
Work |
|
Gross Margin (Traditional) |
|
|
|
Gross Margin (ABC) |
|
|
PA4
-
3 (Algo) Selecting Cost Drivers, Assigning Costs Using
Activity Rates [LO 4
-
1, 4
-
3, 4
-
4, 4
-
6 ]
Harbour Company makes two models of electronic tablets, the Home and the
Work. Basic production information follows:
Home
Work
Direct materials cost
per unit
$
36
$
64
Direct labor cost per
unit
23
40
Sales price per unit
357
566
Expected production per
month
680
units
490
units
Harbour has monthly overhead of $185,900, which is divided into the following
cost pools:
Setup costs
$
77,600
Quality control
69,300
Maintenance
39,000
Total
$
185,900
The company has also compiled the following information about the chosen
cost drivers:
Home
Work
Total
Number of setups
36
61
97
Number of inspections
330
370
700
Number of machine hours
1,100
1,500
2,600
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
$
PA4-3 (Algo) Selecting Cost Drivers, Assigning Costs Using
Activity Rates [LO 4-1, 4-3, 4-4, 4-6 ]
Harbour Company makes two models of electronic tablets, the Home and the
Work. Basic production information follows:
Home Work
Direct materials cost
per unit
$ 36 $ 64
Direct labor cost per
unit
23 40
Sales price per unit 357 566
Expected production per
month
680 units 490 units
Harbour has monthly overhead of $185,900, which is divided into the following
cost pools:
Setup costs $ 77,600
Quality control 69,300
Maintenance 39,000
Total $ 185,900
The company has also compiled the following information about the chosen
cost drivers:
Home Work Total
Number of setups 36 61 97
Number of inspections 330 370 700
Number of machine hours 1,100 1,500 2,600
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 $
