Question

Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the...

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 $ 6 per direct labor-hour
Machine processing $ 4 per machine-hour
Machine setups $ 50 per setup
Production orders $ 90 per order
Shipments $ 14 per shipment
Product sustaining $ 840 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 80 500
Machine-hours 100 1,500
Machine setups 1 4
Production orders 1 4
Shipments 1 10
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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