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:

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		$7.00	per direct labor-hour
Machine processing		$3.00	per machine-hour
Machine setups		$35.00	per setup
Production orders		$170.00	per order
Shipments		$125.00	per shipment
Product sustaining		$800.00	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	1,125	30
Machine-hours	3,200	20
Machine setups	17	1
Production orders	17	1
Shipments	34	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.   Explanation:   Activity Cost Pool Activity Rate            Activity ABC Cost   K425                 Supporting direct labor   $7  per direct labor-hour 1,125  direct labor-hours $ 7,875       Machine processing   $3  per machine-hour 3,200  machine-hours   9,600       Machine setups   $35  per setup 17  setups   595       Production orders   $170  per order 17  orders   2,890       Shipments   $125  per shipment 34  shipments   4,250       Product sustaining   $800  per product 1  product   800                    Total overhead cost           $ 26,010                   M67                 Supporting direct labor   $7  per direct labor-hour 30  direct labor-hours $ 210        Machine processing   $3  per machine-hour 20  machine-hours   60        Machine setups   $35  per setup 1  setups   35        Production orders   $170  per order 1  order   170        Shipments   $125  per shipment 1  shipment   125        Product sustaining   $800  per product 1  product   800                   Total overhead cost           $ 1,400