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 $ 9 per direct labor-hour Machine processing $ 2 per machine-hour Machine setups $ 40 per setup Production orders $ 170 per order Shipments $ 115 per shipment Product sustaining $ 825 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 1,150 30 Machine-hours 3,000 20 Machine setups 15 2 Production orders 15 2 Shipments 30 2 Product sustaining 2 2
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
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 | $ 9 | per direct labor-hour |
| Machine processing | $ 2 | per machine-hour |
| Machine setups | $ 40 | per setup |
| Production orders | $ 170 | per order |
| Shipments | $ 115 | per shipment |
| Product sustaining | $ 825 | 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 | 1,150 | 30 |
| Machine-hours | 3,000 | 20 |
| Machine setups | 15 | 2 |
| Production orders | 15 | 2 |
| Shipments | 30 | 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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Intermediate Accounting principles and analysis
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
2nd Edition
471737933, 978-0471737933
