42. Klumper Corporation is a diversified manufacturer of industrial goods. The c

Question

42. 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 $9.00 per direct labor-hour Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining $4 00 per machine-hour $40.00 per setup $160.00 per order $120.00 per shipment $800 00 per product Activity data have been supplied for the following two products Total Expected Activity K425 M67 Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining 200 1,175 3,400 17 17 34 2,000 40 30 Required: Oetermine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system Activity Cost Pool Supporting direct labor Machine processing Machine setups Production ords Shipments Product sustaining Total overhead cost K425

Explanation / Answer

Activity Cost Pool K425 M67 Supporting Direct Labor $10,575 $360 Machine processing $13,600 $120 Machine setups $680 $80 Production orders $2,720 $320 Shipments $4,080 $240 Product Sustaining $1,600 $1,600 Total Overhead Cost $33,255 $2,720 Activity Cost Pool K425 M67 Supporting Direct Labor =1175*9 =40*9 Machine processing =3400*4 =30*4 Machine setups =17*40 =2*40 Production orders =17*160 =2*160 Shipments =34*120 =2*120 Product Sustaining =2*800 =2*800 Total Overhead Cost =SUM(B2:B7) =SUM(C2:C7)

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