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

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 Activity Rates 59.00 per direct labor-hour 53.00 per machine-hour 35.00 per setup $170.00 per order $130.00 per shipment 5750.00 per product Product sustaining Activity data have been supplied for the following two products Total K425 M67 2,000 30 20 Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining 200 950 2,400 21 42 Required: Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system. Activity Cost Pool K425 M67 Supporting direct labor Machine setups Production orders Product sustaining Total overhead cost

Explanation / Answer

K425 M67 Supporting direct labor 8550 270 Machine processing 7200 60 Machine setups 735 35 Production orders 3570 170 Shipments 5460 130 Product sustaining 750 750 Total overhead cost 26265 1415

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