Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 | $ | 10 | per direct labor-hour |
Machine processing | $ | 2 | per machine-hour |
Machine setups | $ | 45 | per setup |
Production orders | $ | 150 | per order |
Shipments | $ | 125 | 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 | 1,125 | 40 |
Machine-hours | 3,200 | 30 |
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?
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 $ 10 per direct labor-hour $ 2 per machine-hour $ 45 per setup $ 150 per order $ 125 per shipment $ 900 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 Product sustaining Total Expected Activity K425 M67 200 2,000 1,125 40 3, 200 30 7 2 7 2 14 2 2 2 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? K425 M67 Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost $ 0 $ 0
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