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 Rate | |
|---|---|---|
| Supporting direct labor | $ 10 | per direct labor-hour |
| Machine processing | $ 4 | per machine-hour |
| Machine setups | $ 45 | per setup |
| Production orders | $ 170 | per order |
| Shipments | $ 125 | per shipment |
| Product sustaining | $ 775 | 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 | 3,600 | 30 |
| Machine setups | 11 | 3 |
| Production orders | 11 | 3 |
| Shipments | 22 | 3 |
| Product sustaining | 3 | 3 |
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
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Introduction To Government And Not For Profit Accounting
Authors: Martin Ives, Joseph R. Razek, Gordon A. Hosch
5th Edition
0130464147, 978-0130464149
