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 thefollowing six activity cost pools and activity rates:Activity Cost PoolSupporting direct laborMachine processingMachine setupsNumber of units produced per yearDirect labor-hoursActivity Rate$ 11 per direct labor-hour$5 per machine-hour$ 45Production ordersShipments$ 120 per shipmentProduct sustaining$ 900 per productActivity data have been supplied for the following two products:Machine-hoursMachine setupsProduction ordersShipmentsProduct sustainingper setup$ 160 per orderTotal Expected ActivityK425M672,0002001,0252,6007714350403 3 3 3Required:How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Number of units produced per yearDirect labor-hoursMachine-hoursMachine setupsProduction ordersShipmentsProduct sustainingActivity Cost PoolSupporting direct laborMachine processingMachine setupsProduction ordersShipmentsProduct sustainingTotal overhead costTotal Expected ActivityK425M672,000K4252001,0252,60077143M67504033ImmRequired:How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?33

Activity cost pools are commonly employed in activity-based costing (ABC) systems as a component for…

Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system following six activity cost pools and activity rates: Activity Rate $ 11 per direct labor-hour $5 per machine-hour $45 per setup Production orders. $ 160 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Activity Cost Pool Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours. Machine-hours Machine setups Production orders Shipments Product sustaining Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3

Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system following six activity cost pools and activity rates: Activity Rate $ 11 per direct labor-hour $5 per machine-hour $45 per setup Production orders. $ 160 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Activity Cost Pool Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours. Machine-hours Machine setups Production orders Shipments Product sustaining Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company makes two products—Product A and B. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Product A 0.75 20,000 units Product B 0.50 50,000 units Additional information is as follows: Product A requires $40 in direct materials per unit, and Product B requires $32. The direct labor wage rate is $18 per hour. The company’s activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measures) Estimated Overhead Cost Expected Activity Product A Product B Total Machine setups (number of setups) $ 100,000 100 300 400 Special processing (machine-hours) $ 200,000 2,000 6,000 8,000 General factory (Direct labor-hours) $ 150,000 15,000 25,000 40,000
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A
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 per direct labor-hour Machine processing $ 4 per machine - hour Machine setups $ 40 per setup Production orders $ 150 per order Shipments $ 120 per shipment Product sustaining $ 900 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 925 40 Machine - hours 2, 600 30 Machine setups 11 1 Production orders 11 1 Shipments 22 1 Product sustaining 1 1
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 Activity Rate $7 per direct labor-hour $4 per machine-hour $ 45 per setup Production orders. $ 160 per order Shipments $ 130 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: 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 $ K425 Total Expected Activity K425 M67 2,000 0 $ 200 1,000 3,000 5 5 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? M67 10 1 30 20 1 1 0 1 1
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