Pfizer Inc. is using Activity-Based Costing for its drug development and production:

Requirements:

• Calculate the cost per unit using ABC for a new pharmaceutical product:
  • Direct Costs: $200 per unit
  • Indirect Costs: $100 per unit

• Apply Marginal Cost Accounting to assess the cost impact of manufacturing additional units.
• Evaluate the effectiveness of ABC in allocating R&D and production costs.
• Discuss how Standard Cost Accounting could improve cost estimation and control in pharmaceutical manufacturing.
• Provide recommendations to optimize costs based on insights from ABC and Marginal Cost Accounting.

Cost Calculation (ABC):

Category	Amount per Unit ($)
Direct Costs	$200
Indirect Costs	$100
Total Cost per Unit	$300