Question
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
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 PoolActivity RatesSupporting direct labor$9per direct labor-hourMachine processing$4per machine-hourMachine setups$45per setupProduction orders$160per orderShipments$125per shipmentProduct sustaining$775per 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 | 950 | 50 |
Machine-hours | 2,400 | 40 |
Machine setups | 9 | 2 |
Production orders | 9 | 2 |
Shipments | 18 | 2 |
Product sustaining | 2 | 2 |
Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
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