Question

Calculate the total per unit cost of each model using direct labor hours to assign 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 $198,000 consisting of the following activitycost 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——————————- 18,000 Maintenance hours——- 1,200
Total————————————— $198,000
Total direct labor hours used during the month were $8,000.Panasonic produces many different electronic products including the following two products produced duringthe current month.

Model X301 Model Z025
Units produced————————- 1,000 1,000
Direct Materials Costs————–$15,000 $15,000
Direct Labor Costs—————— $12,500 $12,500Direct Labor Hours—————– 500 500
Setup hours—————
———— 50 100
Materials moves——————— 25 50
Assembly hours———————- 800 800
Maintenance hours—————— 10 40

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

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