Question
In: Accounting
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 |
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