Exercise 8-4 Second-Stage Allocation [LO4]
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 $ 4 per machine-hour
Machine setups $ 50 per setup
Production orders $ 90 per order
Shipments $ 14 per shipment
Product sustaining $ 840 per product
Activity data have been supplied for the following two products:
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Exercise 8-4 Second-Stage Allocation [LO4]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 PoolActivity RatesSupporting direct labor$6per direct labor-hourMachine processing$4per machine-hourMachine setups$50per setupProduction orders$90per orderShipments$14per shipmentProduct sustaining$840per product Activity data have been supplied for the following two products: Total Expected Activity K425M67Number of units produced per year2002,000Direct labor-hours80500Machine-hours1001,500Machine setups14Production orders14Shipments14Product sustaining14 Required:Determine the total overhead cost that would be assigned to each of the products listed in the activity-based costing system.
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