Question
Khawja Corporation is a diversified manufacturer of industrial goods. The companys activity based costing system contains the following six activity cost pools and activity rates:
Khawja 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 . . . . . . . . $6.00 per direct labor-hour Machine processing . . . . . . . . . . $4.00 per machine-hour Machine setups . . . . . . . . . . . . . . $50.00 per setup Production orders . . . . . . . . . . . . $90.00 per order Shipments . . . . . . . . . . . . . . . . . . $14.00 per shipment Product sustaining . . . . . . . . . . . $840.00 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 . . . . . . . . . . . . . . . . 80 500 Machine-hours . . . . . . . . . . . . . . . . . . 100 1,500 Machine setups . . . . . . . . . . . . . . . . . . 1 4 Production orders . . . . . . . . . . . . . . . . 1 4 Shipments . . . . . . . . . . . . . . . . . . . . . . 1 10 Product sustaining . . . . . . . . . . . . . . . 1 1 Required: Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system. where, A=22 B=10 C=8
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