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 | $ | 3 | per machine-hour |
| Machine setups | $ | 50 | per setup |
| Production orders | $ | 160 | per order |
| Shipments | $ | 110 | per shipment |
| Product sustaining | $ | 850 | 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 | 1,000 | 30 |
| Machine-hours | 3,000 | 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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Financial Accounting For MBAs
Authors: Peter D. Easton, John J. Wild, Robert F. Halsey, Mary Lea McAnally
6th Edition
161853100X, 978-1618531001
