Problem
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
|
$8.00
|
per direct labor-hour
|
|
Machine processing
|
$3.00
|
per machine-hour
|
|
Machine setups
|
$40.00
|
per setup
|
|
Production orders
|
$170.00
|
per order
|
|
Shipments
|
$115.00
|
per shipment
|
|
Product sustaining
|
$850.00
|
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
|
1,200
|
40
|
|
Machine-hours
|
2,200
|
30
|
|
Machine setups
|
7
|
1
|
|
Production orders
|
7
|
1
|
|
Shipments
|
14
|
1
|
|
Product sustaining
|
1
|
1
|
Required:
Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.