Klumper Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains the following
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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 | $ | 10 | per direct labor-hour |
Machine processing | $ | 4 | per machine-hour |
Machine setups | $ | 50 | per setup |
Production orders | $ | 150 | per order |
Shipments | $ | 115 | per shipment |
Product sustaining | $ | 775 | 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 | 1,100 | 50 |
Machine-hours | 2,600 | 40 |
Machine setups | 17 | 1 |
Production orders | 17 | 1 |
Shipments | 34 | 1 |
Product sustaining | 1 | 1 |
Required:
How much total overhead cost would be assigned to K425 and M67using the activity-based costing system?
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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