Answer:
K425= $1,874
M67= $10,540
Explanation:
Giving the following information:
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
Total Expected Activity
K425 M67
Number of units produced per year 200 2,000
Direct labor-hours 80 500
Machine-hours 100 1,500
Machine setups 1 4
Production orders 1 4
Shipments 1 10
Product sustaining 1 1
To allocate overhead to each product, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
K425= (6*80) + (4*100) + (50*1) + (90*1) + (14*1) + (840*1)
K425= $1,874
M67= (6*500) + (4*1,500) + (50*4) + (90*4) + (14*10) + (840*1)
M67= $10,540
