Exercise 7-4 Second-Stage Allocation [LO7-4] Klumper Corporation is a diversifie

Question

Exercise 7-4 Second-Stage Allocation [LO7-4]

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:

Total Expected Activity

Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.

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:

Explanation / Answer

Statement showing computations Particulars K425 M67 Supporting Direct Labour K425 = 6*80 M67 = 6*500                      480.00                3,000.00 Machine Processing K425 = 4*100 M67 = 4*1,500                      400.00                6,000.00 Machine Set Up K425 = 50*1 M67= 50*4                        50.00                   200.00 Production Orders K425 = 90*1 M67 = 90*4                        90.00                   360.00 Shipment K425 = 1*14 M67= 10*14                        14.00                   140.00 Product Sustaining K425 = 840*1 M67 = 840*1                      840.00                   840.00 Total Overhead Cost                  1,874.00             10,540.00

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