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 | $ 6 | per direct labor-hour |
| Machine processing | $ 4 | per machine-hour |
| Machine setups | $ 50 | per setup |
| Production orders | $ 90 | per order |
| Shipments | $ 14 | per shipment |
| Product sustaining | $ 840 | 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 | 80 | 500 |
| Machine-hours | 100 | 1,500 |
| Machine setups | 1 | 4 |
| Production orders | 1 | 4 |
| Shipments | 1 | 10 |
| Product sustaining | 1 | 1 |
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 | $ 6 | per direct labor-hour |
| Machine processing | $ 4 | per machine-hour |
| Machine setups | $ 50 | per setup |
| Production orders | $ 90 | per order |
| Shipments | $ 14 | per shipment |
| Product sustaining | $ 840 | 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 | 80 | 500 |
| Machine-hours | 100 | 1,500 |
| Machine setups | 1 | 4 |
| Production orders | 1 | 4 |
| Shipments | 1 | 10 |
| Product sustaining | 1 | 1 |
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
| Activity cost pool | K425 | M67 |
| supporting direct labor | ||
| Machine Processing | ||
| Machine Setups | ||
| production orders | ||
| shipments | ||
| production sustaining | ||
| total overhead cost | $ | $ |
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
Risk Management In Organizations An Integrated Case Study Approach
Authors: Margaret Woods
1st Edition
0415591732, 9780415591737
