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
Pool Activity Rates
Supporting direct labor $ 10 per direct labor-hour
Machine processing $ 5 per machine-hour
Machine setups $ 45 per setup
Production orders $ 160 per order
Shipments $ 120 per shipment
Product sustaining $ 775 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 925 40
Machine-hours 2,600 30
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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