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	$	6	per direct labor-hour
Machine processing	$	2	per machine-hour
Machine setups	$	40	per setup
Production orders	$	170	per order
Shipments	$	115	per shipment
Product sustaining	$	900	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	1,050	50
Machine-hours	3,000	40
Machine setups	15	2
Production orders	15	2
Shipments	30	2
Product sustaining	2	2

Required:

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

supporting direct labor

machine processing

machine setups

production orders

shipments

product sustaining

total overhead costs

Answer 1