Klumper Corporation is a diversified manufacturer of industrial goods. The compa
ID: 2443340 • Letter: K
Question
Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains thefollowing 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
K425 M67
Units produced 200 2,000
________________________________________
Direct materials
200 x $13.00 $2,600
2,000 x $56.00 $112,000
Direct labor
200 x $5.60 $1,120
2,000 x $3.50 $7,000
Overheads
Labor Related
80 x $6 $480
500 x $6 $3,000
Machine related
100 x $4.00 $400
1,500 x $4.00 $6,000
Machine setups
1 x $50.00 $50
4 x $50.00 $200
Production orders
1 x $90.00 $90
4 x $90.00 $360
General factory OH
80 x $9 $7,200
500 x $9 $4,500
__________________________
Total $11,940 $133,060
Unit Cost
$11,940 / 200 $59.70
$133,060 / 2,000 $66.53
____________________________
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