Reference no: EM133052018

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 $204,000, consisting of the following activity cost pools for the current month:

Activity Centers	Activity Costs	Cost Drivers	Activity Level
Assembly setups	$45,000	Setup hours	1,500
Materials handling	15,000	Number of moves	300
Assembly	120,000	Assembly hours	12,000
Maintenance	24,000	Maintenance hours	1,200
Total	$204,000

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	$15,000	$15,000
Direct labor costs	$12,500	$12,500
Direct labor hours	500	500
Setup hours	50	100
Materials moves	25	50
Assembly hours	800	800
Maintenance hours	10	40

Required -

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

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