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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 data have been supplied for the following two products:
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
ActivityCostPoolSupportingdirectlaborMachineprocessingMachinesetupsProductionordersShipmentsProductsustainingActivityRates$10perdirectlabor-hour$3permachine-hour$35persetup$150perorder$120pershipment$775perproduct \begin{tabular}{|l|l|l|} \hline Activity Cost Pool & \multicolumn{1}{l|}{ 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} \begin{tabular}{lcc} & \multicolumn{2}{c}{ Total Expected Activity } \\ \cline { 2 - 3 } Number of units produced per year & K425 & M67 \\ Direct labor-hours & 200 & 2,000 \\ Machine-hours & 1,075 & 60 \\ Machine setups & 3,400 & 50 \\ Production orders & 15 & 1 \\ Shipments & 15 & 1 \\ Product sustaining & 30 & 1 \\ \hline \end{tabular}
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