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Department and a direct labor loul U pany has determined its estimated total manufacturing overhead cost for one of its plants to be consisting of
Department and a direct labor loul U pany has determined its estimated total manufacturing overhead cost for one of its plants to be consisting of the following activity cost pools for the current month: P5-3A. Traditional Product Costing Versus Activity-Based Costing Assume that Panasonic 4 Cost Drivers Activity Level Activity Centers Activity Costs $45,000 15,000 120,000 24,000 $204,000 1,500 300 12,000 1,200 Assembly setups Total direct labor hours used during the month were 8,000. Panasonic produces many different electroic products, including the following two products produced during the current month: Chapter 5 Activity-Based Costing Model X301Model Z205 Units produced. 1,000 $15,000 $12,500 500 50 25 800 10 1,000 $15,000 $12,500 500 100 50 800 40 Direct labor costs Setup hours . Materials moves.. Assembly hours .. .. Requirea Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products. Calculate the total per-unit cost of each model using activity-based costing to assign manufactur- ing overhead to products Comment on the accuracy of the two methods for determining product costs. Discuss some of the strategic implications of your answers to the previous requirements. a. b. c. d
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