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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 Pool | Activity Rates | ||
Supporting direct labor | $ | 8 | per direct labor-hour |
Machine processing | $ | 5 | per machine-hour |
Machine setups | $ | 40 | per setup |
Production orders | $ | 150 | per order |
Shipments | $ | 120 | per shipment |
Product sustaining | $ | 800 | 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 | 950 | 50 |
Machine-hours | 3,400 | 40 |
Machine setups | 11 | 2 |
Production orders | 11 | 2 |
Shipments | 22 | 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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