Traditional Product Costing Yersus Activitg$-$Based Costing Azsume that Ponseonic Compony

has determined its estimated total manufacturing overhead cost for one of its plants to be $$204,000,$

consisting of the following activity cost pools for the current month:

Total direct labor hours used during the month were $8,000.$ Panasonic produces many different electronic

products, including the following two products produced during the eurent month:

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.

a$.$ Manufacturing overhead

Direct labor hours

Plantwide overhead rate

Model X$301$

Model Z$205$

Product costs per batch

Direct materials

Direct labor

Manufacturing overhead

Total cost per batch

Number of units per batch

Cost per unit

b$.$

Assembly setups

Materials handling

Assembly

Maintenance

Product costs per batch

Model X$301$

Model Z$205$

Direct materials

Direct labor

Manufacturing overhead

Assembly setups

Materials handling

Assembly

Maintenance

Total cost per batch

Number of units per batch

Cost per unit

c$.$