Keyboard uses activity-based costing. Two of Keyboard'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 Keyboard spends $10,000,000 per month on kitting and $18,000,000 per month on boxing.Keyboard 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 Keyboard estimates it will use 250,000,000 parts per month and ship products with a total volume of 22,500,000 cubic feet per month. Assume that each desktop computer requires 175 parts and has a volume of 7 cubic feet. The predetermined overhead allocation rate for kitting is $0.04 per part and the predetermined overhead allocation rate for boxing is $0.80 per cubic foot. What are the kitting and boxing costs assigned to one desktop computer?
Keyboard uses activity-based costing. Two of Keyboard'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 Keyboard spends $10,000,000 per month on kitting and $18,000,000 per month on boxing.Keyboard 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 Keyboard estimates it will use 250,000,000 parts per month and ship products with a total volume of 22,500,000 cubic feet per month. Assume that each desktop computer requires 175 parts and has a volume of 7 cubic feet. The predetermined overhead allocation rate for kitting is $0.04 per part and the predetermined overhead allocation rate for boxing is $0.80 per cubic foot. What are the kitting and boxing costs assigned to one desktop computer?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter20: Activity-based Costing (abc)
Section: Chapter Questions
Problem 1R: Bumblebee Mobiles manufactures a line of cell phones. The management has identified the following...
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Keyboard uses activity-based costing. Two of Keyboard'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 Keyboard spends $10,000,000per month on kitting and $18,000,000 per month on boxing.Keyboard
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 Keyboard estimates it will use 250,000,000 parts per month and ship products with a total volume of 22,500,000 cubic feet per month.
Assume that each desktop computer requires 175 parts and has a volume of 7 cubic feet. The predetermined overhead allocation rate for kitting is
$0.04 per part and the predetermined overhead allocation rate for boxing is $0.80 per cubic foot.
What are the kitting and boxing costs assigned to one desktop computer?
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