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 Rates 9 per direct labor-hour 4 per machine-hour 40 per setup 160 per order 115 per shipment 825 per product Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Activity data have been supplied for the following two products: Total Expected Activity M67 K425 Number of units produced per year Direct labor-hours 200 2,000 1,050 3,200 40 Machine-hours 30 Machine setups Production orders 3 Shipments Product sustaining 10 3 3 m m m m un un m

Answer 1

Activity Cost Pool	K425				Total
	Direct labor-hours	1050	Cost per direct labor-hour	9	Supporting direct labor	9450
	Machine-hours	3200	Cost per machine-hour	4	Machine processing	12800
	Machine setups	5	Cost per setup	40	Machine setups	200
	Production orders	5	Cost per order	160	Production orders	800
	Shipments	10	Cost per shipment	115	Shipments	1150
	Product sustaining	3	Cost per product	825	Product sustaining	2475
Total overhead cost						26875
Activity Cost Pool	M67
	Direct labor-hours	40	Cost per direct labor-hour	9	Supporting direct labor	360
	Machine-hours	30	Cost per machine-hour	4	Machine processing	120
	Machine setups	3	Cost per setup	40	Machine setups	120
	Production orders	3	Cost per order	160	Production orders	480
	Shipments	3	Cost per shipment	115	Shipments	345
	Product sustaining	3	Cost per product	825	Product sustaining	2475
Total overhead cost						3900
Total overhead cost of K425				26875
No. of units produced of K425				200
	Per Unit Overhead cost			134.375
Total overhead cost of M67				3900
No. of units produced of M67				2000
	Per Unit Overhead cost			1.95