Question
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4]
Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates:
Activity Cost PoolActivity RatesSupporting direct labor$7per direct labor-hourMachine processing$4per machine-hourMachine setups$50per setupProduction orders$160per orderShipments$115per shipmentProduct sustaining$875per product
Activity data have been supplied for the following two products:
Total Expected Activity
K425M67Number of units produced per year2002,000Direct labor-hours1,02560Machine-hours3,40050Machine setups52Production orders52Shipments102Product sustaining22
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Activity Cost Pool K425 M67
Supporting direct labor
Machine processing
Machine setups
Production orders
Shipments
Product
sustaining
Total overhead cost
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Government and Not-for-Profit Accounting Concepts and Practices
Authors: Michael H. Granof, Saleha B. Khumawala, Thad D. Calabrese, Daniel L. Smith
8th edition
1119495814, 1119495857, 1119495819, 9781119495819 , 978-1119495857
