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 $ 8 per direct labor-hour Machine processing $ 4 per machine-hour Machine setups $ 40 per setup Production orders $ 160 per order Shipments $ 115 per shipment Product sustaining $ 850 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 975 30 Machine-hours 3,000 20 Machine setups 9 1 Production orders 9 1 Shipments 18 1 Product sustaining 1 1 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?

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08-11-2019
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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 $ 8 per direct labor-hour Machine processing $ 4 per machine-hour Machine setups $ 40 per setup Production orders $ 160 per order Shipments $ 115 per shipment Product sustaining $ 850 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 975 30 Machine-hours 3,000 20 Machine setups 9 1 Production orders 9 1 Shipments 18 1 Product sustaining 1 1 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?

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facundobuzzetti facundobuzzetti · Answer 1 · 2019-11-09T12:58:10+01:00

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The company’s activity-based costing system contains the following six activity cost pools and activity rates:

Supporting direct labor $ 8 per direct labor-hour

Machine processing $ 4 per machine-hour

Machine setups $ 40 per setup

Production orders $ 160 per order

Shipments $ 115 per shipment

Product sustaining $ 850 per product

Activity data have been supplied for the following two products:

K425

Number of units produced per year 200

Direct labor-hours 975

Machine-hours 3,000

Machine setups 9

Production orders 9

Shipments 18

Product sustaining 1

M67

Number of units produced per year 2,000

Direct labor-hours 30

Machine-hours 20

Machine setups 1

Production orders 1

Shipments 1

Product sustaining 1

Allocated overhead:

K415:

Supporting direct labor $ 8*975= 7,800

Machine processing $ 4*3,000= 12,000

Machine setups $ 40*9= 360

Production orders $ 160*9= 1,440

Shipments $ 115*18= 2,070

Product sustaining $ 850*1= 850

Total= $24,520

M67

Supporting direct labor $ 8*30= 240

Machine processing $ 4*20= 80

Machine setups $ 40*1= 40

Production orders $ 160*1= 160

Shipments $ 115*1= 115

Product sustaining $ 850*1= 850

Total= $1,485