Question

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 $1,272,800 consisting of the following activity cost pools for the current month: Activity Centers Activity Costs Cost Drivers Activity Level Assembly setups $ 264,000 Setup hours 2.000 Materials handing 129,600 Number of moves 600 Assembly 720,000 Assembly hours 18,000 Maintenance 159,200 Maintenance hours 1.990 Total $1,272,800 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 3.000 3.000 Direct materials costs $32,000 $32,000 Direct labor costs $27,000 $27.000 Direct labor hours 700 Setup hours 60 Materials moves 30 60 Assembly hours 900 900 Maintenance hours 20 30 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 S O S Direct labor Overhead Total cost $ OS Units Unit cost SOS 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. X301Z 205 Total direct materials costs S 0 S 0 Total direct labor costs Overhead costs: Assembly setup Materials handling Assembly Maintenance Total costs SOS 0 Unit cost

Answer 1

Answer 1:

Particulars	X301	Z205
Direct material	$   32,000.00	$   32,000.00
Direct labor	$   27,000.00	$   27,000.00
Overheads	$   60,200.00	$   60,200.00
Total costs	$ 119,200.00	$ 119,200.00
Units	3,000.00	3,000.00
Unit cost	$          39.73	$          39.73

Answer 2:

Particulars	X301	Z205
Direct material	$   32,000.00	$   32,000.00
Direct labor	$   27,000.00	$   27,000.00
Overhead cost:
Assembly setup	$     7,920.00	$   15,840.00
Materials handling	$     6,480.00	$   12,960.00
Assembly setup	$   36,000.00	$   36,000.00
Maintenance	$     1,600.00	$     6,400.00
Total costs	$ 111,000.00	$ 130,200.00
Units	3,000.00	3,000.00
Unit cost	$          37.00	$          43.40

Explanation:

Particulars	X301	Z205
Direct material	=32000	=32000
Direct labor	=27000	=27000
Overhead cost:
Assembly setup	=264000/2000*60	=264000/2000*120
Materials handling	=129600/600*30	=129600/600*60
Assembly setup	=720000/18000*900	=720000/18000*900
Maintenance	=159200/1990*20	=159200/1990*80

In case of any doubt, please comment.