Answer:
a)
Kitting: $0.072 per part and Boxing: $0.764 per cubic feet
b)
Kitting: $12.6 and Boxing: $6.9
Explanation:
Given that Keyboard spends $9,000,000 per month on kitting and $21,000,000 per month on boxing.
Keyboard estimates it will use 125,000,000 parts per month and ship products with a total volume of 27,500,000 cubic feet per month.
a) Since Kitting costs based on the number of parts used in the computer:
The predetermined overhead allocation rate for kitting = Money spent on kitting / number of parts used per month = $9000000 / 125000000 = $0.072 per part
Since Boxing costs based on the cubic feet of space the computer required:
The predetermined overhead allocation rate for Boxing = Money spent on Boxing / total = $21000000 / 27500000 = $0.764 per cubic feet.
a) each desktop computer requires 175 parts and has a volume of 9 cubic feet
For kitting, Activity cost per desktop = Predetermined overhead allocation rate x quantity per desktop = $0.072 × 175 = $12.6
For Boxing, Activity cost per desktop = Predetermined overhead allocation rate x quantity per desktop = $0.764 × 9 = $6.9
