Mouse uses activity-based costing. Two of Mouse\'s production activities are kit

Question

Mouse uses activity-based costing. Two of Mouse'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 Mouse spends $12,000,000 per month on kitting and $14,000,000 per month on boxing. Mouse alocates 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 Mouse estimates it will use 400,000,000 parts per month and ship products with a total volume of 28,000,000 cubic feet per month. Assume that each desktop computer requires 150 parts and has a volume of 7 cubic foet. What are the predetermined overhead allocation rates? (Round all calculations to the nearest cent.) Kitting $0.43 per part $0.03 per part Boxing 0.04 per cubic foot $0.03 per cubic foot $33.33 per part $2.00 per cubic foot $0.50 per cubic foot . . $0.03 per part

Explanation / Answer

A B A/B Acivity Pool Costs Activity Total Activity Activiy Rate Kitting 12000000 No of Parts Used 400000000 0.03 Per Part Boxing 14000000 Cubic Feet of Space Required 28000000 0.50 Per Cubic Foot Answer is D

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