Disc uses activity-based costing. Two of Disc's production activities are kitting (assembling the raw materials needed for each computer in one kit) and boxing the completed products for shipment to customers. Assume that Disc spends $4,500,000 per month on kitting and $18,000,000 per month on boxing. Disc allocates the following: Kitting costs based on the number of parts used in the computer • Boxing costs based on the cubic feet of space the computer requires Suppose Disc estimates it will use 90,000,000 parts per month and ship products with a total volume of 22,500,000 cubic feet per month. Assume that each desktop computer requires 100 parts and has a volume of 12 cubic feet. What are the predetermined overhead allocation rates? (Round all calculations to the nearest cent.) Kitting Boxing $20.00 per part $1.25 per cubic foot O B. Kitting Boxing $0.05 per part $0.80 per cubic foot 11 O C. Kitting Boxing $0.20 per part $0.20 per cubic foot. Kitting Boxing $0.04 per part $0.16 per cubic foot O A. O D.
Disc uses activity-based costing. Two of Disc's production activities are kitting (assembling the raw materials needed for each computer in one kit) and boxing the completed products for shipment to customers. Assume that Disc spends $4,500,000 per month on kitting and $18,000,000 per month on boxing. Disc allocates the following: Kitting costs based on the number of parts used in the computer • Boxing costs based on the cubic feet of space the computer requires Suppose Disc estimates it will use 90,000,000 parts per month and ship products with a total volume of 22,500,000 cubic feet per month. Assume that each desktop computer requires 100 parts and has a volume of 12 cubic feet. What are the predetermined overhead allocation rates? (Round all calculations to the nearest cent.) Kitting Boxing $20.00 per part $1.25 per cubic foot O B. Kitting Boxing $0.05 per part $0.80 per cubic foot 11 O C. Kitting Boxing $0.20 per part $0.20 per cubic foot. Kitting Boxing $0.04 per part $0.16 per cubic foot O A. O D.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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disc uses activity-based costing. two of discs production activin
Transcribed Image Text:Disc uses activity-based costing. Two of Disc's production activities are kitting (assembling the raw materials needed for each computer in one kit) and boxing the completed products for shipment to customers. Assume that Disc spends $4,500,000 per month on kitting and
$18,000,000 per month on boxing. Disc allocates the following:
• Kitting costs based on the number of parts used in the computer
• Boxing costs based on the cubic feet of space the computer requires
Suppose Disc estimates it will use 90,000,000 parts per month and ship products with a total volume of 22,500,000 cubic feet per month. Assume that each desktop computer requires 100 parts and has a volume of 12 cubic feet.
What are the predetermined overhead allocation rates? (Round all calculations to the nearest cent.)
O A.
O B.
O C.
O D.
Kitting
$20.00 per part
Kitting
$0.05 per part
Kitting
$0.20 per part
Kitting
$0.04 per part
Boxing
$1.25 per cubic foot
Boxing
$0.80 per cubic foot
Boxing
$0.20 per cubic foot
Boxing
$0.16 per cubic foot
C
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Transcribed Image Text:Compute It uses activity-based costing. Two of Compute It's production activities are kitting (assembling the raw materials needed for each computer in one kit) and boxing the completed products for shipment to customers. Assume that Compute It spends $960,000 per month on
kitting and $32,000 per month on boxing. Compute It allocates the following:
• Kitting costs based on the number of parts used in the computer
• Boxing costs based on the cubic feet of space the computer requires
Suppose Compute It estimates it will use 400,000 parts per month and ship products with a total volume of 6,400 cubic feet per month. Assume that each desktop computer requires 125 parts and has a volume of 2 cubic feet. The predetermined overhead allocation rate for kitting is
$2.40 per part and the predetermined overhead allocation rate for boxing is $5.00 per cubic foot.
What are the kitting and boxing costs assigned to one desktop computer? (Round all calculations to the nearest cent.)
O A.
O B.
O C.
O D.
$
$
$
$
Kitting
300.00 $
Kitting
30.00 $
Kitting
10.00 $
Kitting
9.60 $
Boxing
Boxing
137.50
Boxing
10.00
300.00
Boxing
148.50
(...)
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