FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4]
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
Supporting direct labor
Machine processing
Machine setups
Number of units produced per year
Direct labor-hours
Activity Rate
$ 11 per direct labor-hour
$5 per machine-hour
$ 45
Production orders
Shipments
$ 120 per shipment
Product sustaining
$ 900 per product
Activity data have been supplied for the following two products:
Machine-hours
Machine setups
Production orders
Shipments
Product sustaining
per setup
$ 160 per order
Total Expected Activity
K425
M67
2,000
200
1,025
2,600
7
7
14
3
50
40
3 3 3 3
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
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Transcribed Image Text:Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] 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 Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours Activity Rate $ 11 per direct labor-hour $5 per machine-hour $ 45 Production orders Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Machine-hours Machine setups Production orders Shipments Product sustaining per setup $ 160 per order Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Number of units produced per year
Direct labor-hours
Machine-hours
Machine setups
Production orders
Shipments
Product sustaining
Activity Cost Pool
Supporting direct labor
Machine processing
Machine setups
Production orders
Shipments
Product sustaining
Total overhead cost
Total Expected Activity
K425
M67
2,000
K425
200
1,025
2,600
7
7
14
3
M67
50
40
3
3
Imm
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
3
3
expand button
Transcribed Image Text:Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Total Expected Activity K425 M67 2,000 K425 200 1,025 2,600 7 7 14 3 M67 50 40 3 3 Imm Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? 3 3
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