Klumper Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains...
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Accounting
Klumper Corporation is a diversified manufacturer of industrial goods. The companys 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
$
2
per machine-hour
Machine setups
$
40
per setup
Production orders
$
160
per order
Shipments
$
120
per shipment
Product sustaining
$
875
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
1,125
50
Machine-hours
3,200
40
Machine setups
17
3
Production orders
17
3
Shipments
34
3
Product sustaining
3
3
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Answer & Explanation
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