Question
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
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 $1,272,800 consisting of the following activity cost pools for the current month:
Activity Centers Activity Costs Cost Drivers Activity Level
Assembly setups $264,000 Setup hours 2,200
Materials handling 129,600 Number of moves 600
Assembly 720,000 Assembly hours 18,000
Maintenance 159,200 Maintenance hours 1,990
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Total $1,272,800
Total direct labor hours used during the month were 14,800. Panasonic produces many different electronic products, including the following two products produced during the current month:
Model X301 Model Z205
Units produced 3,000 3,000
Direct material costs $32,000 $32,000
Direct labor costs $27,000 $27,000
Direct labor hours 700 700
Setup hours 60 120
Materials moves 30 60
Assembly hours 900 900
Maintenance hours 20 80
(a) Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products. Round answers for unit cost to two decimal places, if applicable.
X301 Z205
Direct materials $_______ $______
Direct labor $_______ $_______
Overhead $_______ $_______
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Total cost $________ $________
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Units __________ _______
Unit cost $_________ $_________
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(b) Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products.
Round answers for unit cost to two decimal places, if applicable
X301 Z205
Total direct material costs $_____ $______
Total direct labor costs $_____ $______
Overhead costs:
Assembly setup $______ $_______
Materals handling $_______ $_______
Assembly $_______ $______
Maintenance $________ $_______
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Total Costs $________ $_________
-----------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Units produced _________ ________
Unit cost $_________ $_______
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