Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Klumper Corporation is a diversified manufacturer of industrial goods. The company's 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 company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Activity Rates $8 per direct labor-hour $3 per machine-hour $35 per setup $ 160 per order $ 110 per shipment $ 850 per product Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Total Expected Activity K425 M67 200 2,000 1,100 50 3,200 40 17 1 17 1 34 1 1 Product sustaining Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Activity Cost Pool K425 Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost M67 art 2 Exercises-ABC Hubs Sprockets Direct Labor-Hours per Unit 0.60 0.20 Annual Production 11,000 units 55,000 units Saved Additional information about the company follows: a. Hubs require $37 in direct materials per unit, and Sprockets require $11. b. The direct labor wage rate is $11 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required: 1. Compute the activity rate for each activity cost pool. Cost Estimated Overhead Hubs Activity Sprockets Total 140 112 252 4,600 0 4,600 NA NA NA $ 34,020 $ 253,000 $ 204,600 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for each activity cost pool. Activity Cost Pool. Machine setups Special processing Activity Rate per setup) per MH
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started