Klumper Corporation is a diversified manufacturer of industrial goods. The compa
ID: 2341590 • Letter: K
Question
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 $ 6.00 per direct labor-hour S 5.00 per machine-hour S 40.00 per setup $ 160.00 per order $ 115.00 per shipment 900.00 per product Activity data have been supplied for the following two products: Total Expected K425 M67 Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining 925 3,000 2,000 60 50 18 Required Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system. Cost Pool K425 M67 Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead costExplanation / Answer
Answer
K 425
M 67
Activity Rates
No. of cost driver
Overhead cost allocated = ANSWER
No. of cost driver
Overhead cost allocated = ANSWER
[A]
[B]
[C = A x B]
[D]
[E = A x D]
Supporting Direct Labor
$ 6.00
per direct labor hour
925
$ 5,550.00
60
$ 360.00
Machine Processing
$ 5.00
per machine hour
3,000
$ 15,000.00
50
$ 250.00
Machine Setups
$ 40.00
per setup
9
$ 360.00
1
$ 40.00
Production Orders
$ 160.00
per order
9
$ 1,440.00
1
$ 160.00
Shipments
$ 115.00
per shipment
18
$ 2,070.00
1
$ 115.00
Product Sustaining
$ 900.00
per product
1
$ 900.00
1
$ 900.00
Total Overhead cost
$ 25,320.00 = Answer
$ 1,825.00 = Answer
K 425
M 67
Activity Rates
No. of cost driver
Overhead cost allocated = ANSWER
No. of cost driver
Overhead cost allocated = ANSWER
[A]
[B]
[C = A x B]
[D]
[E = A x D]
Supporting Direct Labor
$ 6.00
per direct labor hour
925
$ 5,550.00
60
$ 360.00
Machine Processing
$ 5.00
per machine hour
3,000
$ 15,000.00
50
$ 250.00
Machine Setups
$ 40.00
per setup
9
$ 360.00
1
$ 40.00
Production Orders
$ 160.00
per order
9
$ 1,440.00
1
$ 160.00
Shipments
$ 115.00
per shipment
18
$ 2,070.00
1
$ 115.00
Product Sustaining
$ 900.00
per product
1
$ 900.00
1
$ 900.00
Total Overhead cost
$ 25,320.00 = Answer
$ 1,825.00 = Answer
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