Klumper Corporation is a diversified manufacturer of industrial goods. The compa
ID: 2574167 • Letter: K
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 Activity rates
Supporting direct-labor $6.00 per direct-labor hour
machine processing $4.00 per machine-hour
Machine setups $5.00 per setup
Production orders $90.00 per order
Shipments $14.00 per shipment
Production sustaining $840 per product
Activity data have been supplied for the following two products:
Total Expected Activity
K425 M67
Number of units produced per year 200 2,000
Direct Labor-hours 80 500
Machine - hours 100 1,500
Machine setups 1 4
Production orders 1 4
Shipments 1 10
Production sustaining 1 1
Required: Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.
Explanation / Answer
K425 M67 Supporting direct labor 480 3000 Machine processing 400 6000 Machine setups 5 20 Production orders 90 360 Shipments 14 140 Product sustaining 840 840 Total overhead cost 1829 10360
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