Answer Happy

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 $204,000, consisting of the following activity cost pools for the current month: Activity Centers Assembly setups Materials handling Assembly Maintenance Total Activity Costs $ 45,000 15,000 120,000 24,000 $ 204,000 Cost Drivers Setup hours Number of moves Assembly hours Maintenance hours Activity Level 1,500 300 12,000 1,200 2 Total direct labor hours used during the month were 8,000. Panasonic produces many different electronic s products, including the following two products produced during the current month: | 5 Model X301 Model 2205 6 Units produced 1,000 1,000 7 Direct materials costs $ 15,000 $ 15,000 8 Direct labor costs $ 12,500 $ 12,500 9 Direct labor hours 500 500 0 Setup hours 50 100 1 Materials moves 25 50 2 Assembly hours 800 800 23 Maintenance hours 10 40 PA 25 Required Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing 27 overhead to products. 28 b. Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing 29 overhead to products, 30 C Comment on the accuracy of the two methods for determining product costs. 31 d. Discuss some of the strategic implications of your answers to the previous requirements. 32 26 a