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
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Traditional Product Costing versus Activity-Based Costing
Assume that Panasonic Company has determined its estimated total
| 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 |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
