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P5-4A. Stage Two ABC for Manufacturing Merlot Company has determined its activity cost pools and cost drivers to be the following:

Cost Pools

Setup$59,500

Materials handling.$16,000

Machine operation.$300,000

Packing$60,000

Total indirect Manufacturing costs..$435,500

Cost drivers

Setups..$350

Materials moves$640

Machine hours$20,000

Packing orders$1,000

One product made by Merlot, metal casements, used the following activities during the period to produce 500 unit:

Setups..20

Materials moves.80

Machine hours1,900

Packing orders.150

Required

1. Calculate the cost per unit of activity for each activity cost pool for Merlot Company
2. Calculate the manufacturing overhead cost per metal casement manufactured during the period.

P5-5A. 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 hours1,200

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

Setup hours.500 500

Material moves..50 100

Assembly hours.25 50

Maintenance hours..10 40

Required

1. Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products.
2. Calculate the total price per-unit cost of each model using activity-based costing to assign manufacturing overhead to products.
3. Comment on the accuracy of the two methods for determining product costs.
4. Discuss some of the strategic implication of your answers to the previous requirements.

   b.	Overhead costs of producing metal casements:
   			Activity level		Overhead cost per unit		Total cost
   	Setups
   	Materials moves
   	Machine hours
   	Packing orders
   	Total cost per batch
   	Number of units per batch
   	Cost per unit

I J K L M N O P Q R B C D E F G H 1 Stage Two ABC for Manufacturine Merlot Company has determined its activity cost pools and 2 cost drivers to be the following: $ 4 Cost Pools Setup Materials handling Machine operation Packing Total indirect manufacturing costs 59,500 16.000 300,000 60,000 435,500 $ 11 Cost drivers Setups Materials moves Machine hours Packing orders 350 640 20,000 1,000 17 One product made by Merlot, metal casements, used the following activities during the period 18 500 units: Setups Materials moves Machine hours 1.900 22 Packing orders 150 19 20 21 24 Required 25 a Calculate the cost per unit of activity for each activity cost pool for Merlot Company, 26 Calculate the manufacturing overhead cost per metal casernent manufactured during the period, Cost per unit of activity Cast driver 29 Overhead pool: Materials moves Machine hours Packing orders 34 36 b Overhead costs of producing metal casements: Overhead 1 ps4 os.sa e 1 Type here to search I J K L M N O P Q R B C D E F G H 1 Stage Two ABC for Manufacturine Merlot Company has determined its activity cost pools and 2 cost drivers to be the following: $ 4 Cost Pools Setup Materials handling Machine operation Packing Total indirect manufacturing costs 59,500 16.000 300,000 60,000 435,500 $ 11 Cost drivers Setups Materials moves Machine hours Packing orders 350 640 20,000 1,000 17 One product made by Merlot, metal casements, used the following activities during the period 18 500 units: Setups Materials moves Machine hours 1.900 22 Packing orders 150 19 20 21 24 Required 25 a Calculate the cost per unit of activity for each activity cost pool for Merlot Company, 26 Calculate the manufacturing overhead cost per metal casernent manufactured during the period, Cost per unit of activity Cast driver 29 Overhead pool: Materials moves Machine hours Packing orders 34 36 b Overhead costs of producing metal casements: Overhead 1 ps4 os.sa e 1 Type here to search

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