Honda Motor Co., Ltd. is analyzing its production costs using different costing approaches:

• Requirements:
  • Calculate the Marginal Cost per additional vehicle produced:
    • Variable Costs: $25,000
    • Fixed Costs: $20,000,000
• Apply Standard Cost Accounting to establish cost targets for vehicle assembly components.
• Evaluate the benefits of Activity-Based Costing in allocating quality control and testing costs.
• Discuss how each costing method influences pricing strategies and profitability in automotive manufacturing.

Marginal Cost Calculation:

Category	Amount ($)
Variable Costs	$25,000
Fixed Costs	$20,000,000
Total Cost	$20,025,000