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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 $436,000 consisting of the following activity cost pools for the current month:

Activity Centers Activity Costs Cost Drivers Activity Level
Assembly setups $ 124,000 Setup hours 4,000
Materials handling 57,000 Number of moves 600
Assembly 225,000 Assembly hours 12,500
Maintenance 30,000 Maintenance hours 1,200
Total $436,000

Total direct labor hours used during the month were 16,000. 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 $18,550 $18,550
Direct labor costs $5,000 $5,000
Direct labor hours 200 200
Setup hours 30 60
Materials moves 75 150
Assembly hours 500 750
Maintenance hours 25 45

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

Using Direct labor hour
Model X301 Model Z205
$ $
Direct materials costs 18,550 18,550
Direct labor costs 5,000 5,000
Overheads 5,450 5,450 See working note 1
Total Cost 29,000 29,000
Units produced 2,000 2,000
Unit Cost 14.50 14.50
Using Activity Level
Model X301 Model Z205 Overhead cost attributable to 2
$ $ Products allocated on the basis
Direct materials costs 18,550 18,550 Activity. See working note 2 Below
Direct labor costs 5,000 5,000
Setup hours 930 1,860 30 60 `
Materials moves 7,125 14,250 75 150
Assembly hours 9,000 13,500 500 750
Maintenance hours 625 1,125 25 45
41,230 54,285
Units produced 2,000 2,000
Cost Per Unit 20.62 27.14
Note:1
It produces many other productsincluding the above 2 Products
Toatl Labor hour 16,000 A
Total Overhead 436,000 B
Hours used by above Products 400 C
Overhead used for 2 products $10,900 B*C/A
Hours used by above Products Equally 200+200
Overhead Apportioned Equally $5,450 Each
Working Note 2 A B C D B/A*C B/A*D
Activity Centers Activity Costs for all products Activity Level for all products Activity Level for 2 products Overhead Cost for 2 Products Activity Level model X30 Activity Level model Z205 Overhead allocation model X30 Overhead allocation model Z205
$ $ $ $
Assembly setups 124,000 4,000 90 2,790 30 60 930 1,860
Materials handling 57,000 600 225 21,375 75 150 7,125 14,250
Assembly 225,000 12,500 1,250 22,500 500 750 9,000 13,500
Maintenance 30,000 1,200 70 1,750 25 45 625 1,125
ekkarill92 answered 11 months ago
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