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Traditional Product Costing versus Activity-Based Costing Assume that Panasonic Company has determined its estimated total manufacturing...

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 $636,400 consisting of the following activity cost pools for the current month:

Activity Centers Activity Costs Cost Drivers Activity Level
Assembly setups $ 132,000 Setup hours 2,000
Materials handing 64,800 Number of moves 600
Assembly 360,000 Assembly hours 18,000
Maintenance 79,600 Maintenance hours 1,990
Total $636,400

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 2,000 2,000
Direct materials costs $27,000 $27,000
Direct labor costs $22,000 $22,000
Direct labor hours 700 700
Setup hours 60 120
Materials moves 30 60
Assembly hours 900 900
Maintenance hours 20 80

Required
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 Answer Answer
Direct labor Answer Answer
Overhead Answer Answer
Total cost Answer Answer
Units Answer Answer
Unit cost Answer Answer


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 materials costs Answer Answer
Total direct labor costs Answer Answer
Overhead costs:
Assembly setup Answer Answer
Materials handling Answer Answer
Assembly Answer Answer
Maintenance Answer Answer
Total costs Answer Answer
Units produced Answer Answer
Unit cost Answer Answer

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 $636,400 consisting of the following activity cost pools for the current month:

Activity Centers Activity Costs Cost Drivers Activity Level
Assembly setups $ 132,000 Setup hours 2,000
Materials handing 64,800 Number of moves 600
Assembly 360,000 Assembly hours 18,000
Maintenance 79,600 Maintenance hours 1,990
Total $636,400

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 2,000 2,000
Direct materials costs $27,000 $27,000
Direct labor costs $22,000 $22,000
Direct labor hours 700 700
Setup hours 60 120
Materials moves 30 60
Assembly hours 900 900
Maintenance hours 20 80

Required
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 Answer Answer
Direct labor Answer Answer
Overhead Answer Answer
Total cost Answer Answer
Units Answer Answer
Unit cost Answer Answer


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 materials costs Answer Answer
Total direct labor costs Answer Answer
Overhead costs:
Assembly setup Answer Answer
Materials handling Answer Answer
Assembly Answer Answer
Maintenance Answer Answer
Total costs Answer Answer
Units produced Answer Answer
Unit cost Answer Answer


Solutions

Expert Solution

Answer:

Answer-1:
Predetermined overhead rate = $636,400 / 14,800 = $43
Model X301 Model Z205
Raw material $       27,000 $       27,000
Direct labor            22,000           22,000
Overhead            30,100           30,100
Total cost $       79,100 $       79,100
Units              2,000              2,000
Unit cost $         39.55 $         39.55
Answer-2:
Schedule of Activity-Based Overhead Rates per Cost Driver
Activity cost pool Overhead
cost		 Use of cost drivers Activity-based
overhead rate
Assembly Set up costs $     132,000              2,000 set ups hours $   66.00 per set up hour
Material handling costs            64,800                 600 No. of moves     108.00 per move
Assembly cost         360,000           18,000 Assembly hours        20.00 per assembly hour
Maintenance cost            79,600              1,990 Maintenance hours        40.00 per maintenance hour
        636,400
Model X301 Model Z205
Raw material $       27,000 $       27,000
Direct labor            22,000           22,000
Overhead:
Assembly Set up costs              3,960              7,920
Material handling costs              3,240              6,480
Assembly cost            18,000           18,000
Maintenance cost                 800              3,200
Total overhead cost            26,000           35,600
Total cost $       75,000 $       84,600
Units produced              2,000              2,000
Unit cost $         37.50 $         42.30

ekkarill92 answered 2 years ago
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