Klumper Corporation is a diversified manufacturer of industrial goods. The compa
ID: 2403331 • 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:
Total Expected Activity
Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.
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:
Explanation / Answer
Answer:
Activity Cost Pool
K425
M68
Supporting direct labor
9250
500
Machine processing
12000
200
Machine setups
385
70
Production orders
1870
340
Shipments
2420
220
Product sustaining
1550
1550
Total overhead cost
27475
2880
Working notes for the above answer is as under
K425
Activity Cost Pool
Activity Rate
Activity
ABC Cost
K425
A
B
C=A*B
Supporting direct labor
10
per direct labor-hour
925
9250
Machine processing
5
per machine-hour
2400
12000
Machine setups
35
per setup
11
385
Production orders
170
per order
11
1870
Shipments
110
per shipment
22
2420
Product sustaining
775
per product
2
1550
Total overhead cost
27475
M-67
Activity Rate
Activity
ABC Cost
M67
A
B
C=A*B
Supporting direct labor
10
per direct labor-hour
50
500
Machine processing
5
per machine-hour
40
200
Machine setups
35
per setup
2
70
Production orders
170
per order
2
340
Shipments
110
per shipment
2
220
Product sustaining
775
per product
2
1550
Total overhead cost
2880
Activity Cost Pool
K425
M68
Supporting direct labor
9250
500
Machine processing
12000
200
Machine setups
385
70
Production orders
1870
340
Shipments
2420
220
Product sustaining
1550
1550
Total overhead cost
27475
2880
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