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 | $ | 3 | per machine-hour |
| Machine setups | $ | 40 | per setup |
| Production orders | $ | 170 | per order |
| Shipments | $ | 125 | per shipment |
| Product sustaining | $ | 825 | 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 | 925 | 50 |
| Machine-hours | 2,600 | 40 |
| 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?
| Activity cost pools | K425 | M67 |
| supporting direct labor | ||
| machine processing | ||
| machine setups | ||
| production orders | ||
| shipments | ||
| product sustaining | ||
| Total overhead cost | $ | $ |
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Auditing and Assurance Services A Systematic Approach
Authors: William Messier, Steven Glover, Douglas Prawitt
9th edition
1308361491, 77862333, 978-1259248290, 9780077862336, 1259162346, 978-1259162343
