Klumper Corporation is a diversified manufacturer of industrial goods. The compa
ID: 2387884 • 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 Activity Rates
Labor related $ 6.00 per direct labor-hour
Machine related $ 4.00 per machine-hour
Machine setups $ 50.00 per setup
Production orders $ 90.00 per order
Shipments $14.00 per shipment
General factory $9.00 per direct labor-hour
Cost and activity data have been supplied for the following products:
K425 M67
Direct materials cost per unit $13.00 $56.00
Direct labor cost per unit $5.60 $3.50
Number of units produced per year 200 2,000
Total Expected Activity
K425 M67
Direct labor-hours 80 500
Machine-hours 100 1,500
Machine setups 1 4
Production orders 1 4
Shipments 1 10
Required:
Compute the unit product cost of each product listed above.
Explanation / Answer
Overhead cost for K425
Overhead cost for M67
Overhead cost for K425
Activity Cost Pools Activity Rate Activity Abc Cost Supporting direct labor $6.00 80 $480.00 Machine processing $4.00 100 $400.00 Machine setup $50.00 1 $50.00 Production orders $90.00 1 $90.00 Shipments $14.00 1 $14.00 General factory $9.00 80 $720.00 Material $13.00 200 $2,600.00 Direct labor cost $5.60 200 $1,120.00 Total $5,474.00Overhead cost for M67
Activity Cost Pools Activity Rate Activity Abc Cost Supporting direct labor $6.00 500 $3,000.00 Machine processing $4.00 1,500.00 $6,000.00 Machine setup $50.00 4 $200.00 Production orders $90.00 4 $360.00 Shipments $14.00 10 $140.00 General factory $9.00 500.00 $4,500.00 Material $56.00 2,000 $112,000.00 Direct labor cost $3.50 2,000 $7,000.00 Total $133,200.00Related Questions
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