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 $ 9 per direct labor-hour Machine processing $ 4 per machine-hour Machine setups $ 50 per setup Production orders $ 170 per order Shipments $ 130 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 950 50 Machine-hours 2,600 40 Machine setups 9 2 Production orders 9 2 Shipments 18 2 Product sustaining 2 2

Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?

Answer 1