Question
Exercise 7-4 Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains the following six activity cost
Exercise 7-4 Second-Stage Allocation [LO7-4]
Klumper Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains the following six activity cost pools and activity rates:
| Activity Cost Pool | Activity Rates | ||
| Supporting direct labor | $ | 8 | per direct labor-hour |
| Machine processing | $ | 4 | per machine-hour |
| Machine setups | $ | 45 | per setup |
| Production orders | $ | 160 | per order |
| Shipments | $ | 110 | per shipment |
| Product sustaining | $ | 900 | per product |
Activity data have been supplied for the following two products:
| Total Expected Activity | ||
| K425 | M67 | |
| Number of units produced per year | 200 | 2,000 |
| Direct labor-hours | 1,000 | 50 |
| Machine-hours | 3,400 | 40 |
| Machine setups | 19 | 3 |
| Production orders | 19 | 3 |
| Shipments | 38 | 3 |
| Product sustaining | 3 | 3 |
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
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Auditing And Systems Objective Questions And Explanations Comprehensive And Systematic Covarage Of Auditing Including The Most Recent Authoritative Pronouncements
Authors: Irvin N. Gleim
7th Edition
0917539672, 978-0917539671
