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 Shipments Product sustaining Activity Rates $ 9 per direct labor-hour $ 5 per machine-hour $ 5e per setup $ 170 per order s 11e per shipment s see per product Activity data have been supplied for the following two products Total Expected Activit K425 Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining 2e0 2,e 925 40 30 2,68 Requirec How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders K425 M67 Product sustaining Total overhead cost

Explanation / Answer

Activity cost pool K425 M67 Supporting direct labor 8325 360 Machine process 13000 150 Machine setups 350 50 Production orders 1190 170 Shipments 1540 110 Product sustaining 800 800 Total overhead cost 25205 1640 *Working note: Activity K425 M67 (A) Activity rate (B) K425 (C) M67 (D) B*C B*D Supporting direct labor 9 per direct labor hour 925 40 8325 360 Machine process 5 per machine hour 2,600 30 13000 150 Machine setups 50 per setup 7 1 350 50 Production orders 170 per order 7 1 1190 170 Shipments   110 per shipment 14 1 1540 110 Product sustaining 800 per product 1 1 800 800

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