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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 $252,000, consisting of the following activity cost pools for the current month:

Activity Centers

 Activity Costs

Cost Drivers

 Activity Level
Assembly setups $69,000

Setup hours

 1,500
Materials handling 39,000

Number of moves

 300
Assembly 120,000

Assembly hours

 12,000
Maintenance 24,000 Maintenance hours 1,200
Total $252,000

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 current month:

Model X301 Model Z205
Units produced 1,000 1,000
Direct materials costs $39,000 $39,000
Direct labor costs $36,500 $36,500
Direct labor hours 500 500
Setup hours 50 100
Materials moves 25 50
Assembly hours 800 800
Maintenance hours 10 40

a. Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products.
Round rate to two decimal places.
Overhead rate per direct labor hour $Answer


Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.

X301 Z205
Direct materials Answer Answer
Direct labor Answer Answer
Overhead cost Answer Answer
Total cost Answer Answer
Units Answer Answer
Per unit cost Answer Answer

b. Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products.

Assembly setups

Answer
Materials handling

Answer
Assembly

Answer
Maintenance

Answer

Round cost per unit to two decimal places, if needed.

X301 Z205
Direct materials cost Answer Answer
Direct labor cost Answer Answer
Manufacturing overhead costs:
Assembly setup Answer Answer
Materials handling Answer Answer
Assembly Answer Answer
Maintenance Answer Answer
Total cost Answer Answer
Units Answer Answer
Per unit cost Answer Answer

Solutions

Expert Solution

(a) Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products :-

Overhead rate per direct labor hour = Overhead/Direct Labor hours

              = $252000/8000 = $31.50

X301 Z205
Direct materials $39,000 $39,000
Direct labor $36,500 $36,500
Overhead cost

(500 * $31.50)

=$15750

(500 * $31.50)

=$15750
Total cost $91,250 $91,250
Units 1000 1000
Per unit cost $91.25 $91.25

(b) Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products:-

Assembly setups ($69000/1500) $46
Materials handling ($39000/300) $130
Assembly ($120000/12000) $10
Maintenance ($24000/1200) $20
X301 Z205
Direct materials $39,000 $39,000
Direct labor $36,500 $36,500
Manufacturing overhead costs:
Assembly setup

(50 * $46)

=$2,300

(100 * $46)

=$4,600
Materials handling

(25 * $130)

=$3,250

(50 * $130)

=$6,500
Assembly

(800 * $10)

$8,000

(800 * $10)

$8,000
Maintenance

(10 * $20)

=$200

(40 * $20)

=$800
Total cost $89,250 $95,400
Units 1000 1000
Per unit cost $89.25 $95.40

ekkarill92 answered 3 years ago
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