Klumper Corporation is a diversified manufacturer of industrial goods. The compa

Question

Klumper Corporation is a diversified manufacturer of industrial goods. The company's ABC system has the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Cost and activity data have been supplied for the following products: K425 M67 Direct materials cost per unit.... Direct labour cost per unit.......... .. .. $126.00 $%212.00 $7.20 400 $4.50 4,000 Total Expected Activity M67 1,000 3,000 K425 160 200 Direct labour-hours. Shipments... 20 Required. Compute the unit product cost of each of the products listed above

Explanation / Answer

Answer:-

Klumper Corporation Product cost Particulars K425 M67 $ $ Direct material 400 units*$126 per unit=50400 4000 units*$212 per unit=848000 Direct labor 400 units*$7.20 per unit=2880 4000 units*$4.50 per unit=18000 Machine releted cost $18 per MHs*200 MHs=3600 $18 per MHs*3000 MHs=54000 Machine setup cost $50 per setup*2 setup=100 $50 per setup*8 setup=400 Production orders $120 per order*2 order=240 $120 per order*8 order=960 Shipments $18 per shipment*2 =36 $18 per shipment*20 =360 General factory $38 per DLHs*160 DLHs=6080 $38 per DLHs*1000 DLHs=38000 Total product cost (a) 63336 959720 No. of units (b) 400 4000 Product cost per unit (c=a/b) 158.34 239.93

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