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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 | $ 2 | per machine-hour |
Machine setups | $ 40 | per setup |
Production orders | $ 160 | per order |
Shipments | $ 125 | per shipment |
Product sustaining | $ 875 | 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 | 950 | 60 |
Machine-hours | 3,400 | 50 |
Machine setups | 15 | 3 |
Production orders | 15 | 3 |
Shipments | 30 | 3 |
Product sustaining | 3 | 3 |
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
\begin{tabular}{|l|l|l|} \hline Activity Cost Pool & \multicolumn{1}{c|}{ K425 } & \multicolumn{1}{c|}{ M67 } \\ \hline Supporting direct labor & & \\ \hline Machine processing & & \\ \hline Machine setups & & \\ \hline Production orders & & \\ \hline Shipments & & \\ \hline Product sustaining & & \\ \hline Total overhead cost & & \\ \hline \end{tabular}
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