Question
E6-24. Traditional Product Costing versus Activity-Based Costing Assume that Panasonic Company has determined its estimated total manufacturing overhead cost for one of its plants
E6-24. Traditional Product Costing versus Activity-Based Costing Assume that Panasonic Company has determined its estimated total manufacturing overhead cost for one of its plants to be $318,200, consisting of the following activity cost pools for the current month: LO2, 3, 4 Panasonic Com Homework Activity Centers MBC Activity Costs Cost Activity Drivers Level Assembly setups $ 66,000 Setup hours 2,000 Materials handling 32,400 Assembly 180,000 Number of moves.. Assembly hours 600 18,000 Maintenance. 39,800 Maintenance hours.. 1,990 Total. $318,200 Total direct labor hours used during the month were 14,800. Panasonic produces many different elec- tronic products, including the following two products produced during the current month: Units produced. Direct materials costs. Direct labor costs Direct labor hours. Setup hours Materials moves. Assembly hours Maintenance hours. Model Model X301 Z205 1,500 1,500 $22,000 $22,000 $17,000 $17,000 700 700 60 120 30 60 900 900 20 80 Required a. Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products. b. Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products. c. Comment on the accuracy of the two methods for determining product costs. d. Discuss some of the strategic implications of your answers to the previous requirements. Lost Costing versus Activity-Based Costing LO2, cold under the customers'
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started