Question
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 Activity Rates Supporting direct labor $ 7 per direct labor-hour Machine processing $ 3 per machine-hour Machine setups $ 35 per setup Production orders $ 170 per order Shipments $ 120 per shipment Product sustaining $ 900 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 1,050 30
Machine-hours 3,200 20
Machine setups 7 2
Production orders 7 2
Shipments 14 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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