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 data have been supplied for the following two products:

Total Expected Activity

Activity Cost Pool Activity Rates Supporting direct labor $ 11 per direct labor-hour Machine processing $ 4 per machine-hour Machine setups $ 35 per setup Production orders $ 170 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? M67 Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost K425 0 $%

Explanation / Answer

Calculate total overhead cost assigned to K425 and M67 using activity based costing system :

Activity cost pool K425 M67 Supporting direct labour 10725 550 machine processing 9600 160 machine setups 525 105 production orders 2550 510 shipments 3600 360 product sustaining 2700 2700 total overhead cost 29700 4385

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