Liao Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards.

Activity measures for the two kinds of keyboards follow.

Required
a. Compute the cost per unit of laptop and desktop keyboards, assuming that Liao made 300 units of each type of keyboard. Round your computation to two decimal points.
b. Explain why laptop keyboards cost more to make even though they have less material cost and are smaller than desktopkeyboards.

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Activity Allocation Base Allocation Rate Materials receiving & handling Production setup Assembly Quality inspection Packing and shipping Cost of material Number of setups $50.00 per setup Number of parts $2.50 per part Inspection time 0.75 per minute Number of orders $10.00 per order 2% of material cost Labor Material Number Number Inspection Number Cost Cost of Setups of Parts i of Orders Laptops $630 $3,000 30 Desktops 575 2,400 12 42 3,600 min. 24 2,500 min. 20 65