Homework SourseKlumper Corporation is a diversified manufacturer of industr
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
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
| Activity Cost Pool | Activity Rates | ||
| Supporting direct labor | $ | 11 | per direct labor-hour |
| Machine processing | $ | 3 | per machine-hour |
| Machine setups | $ | 35 | per setup |
| Production orders | $ | 150 | per order |
| Shipments | $ | 130 | per shipment |
| Product sustaining | $ | 775 | per product |
Solution
Calculate total overhead cost :
| K425 | M67 | |
| Supporting direct labor | 11275 | 550 |
| Machine processing | 7200 | 120 |
| Machine setups | 595 | 70 |
| Production orders | 2550 | 300 |
| Shipments | 4420 | 260 |
| Product sustaining | 1550 | 1550 |
| Total overhead cost | 27590 | 2850 |
