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

$$5,000,000$ per month on kitting and $$21,000,000$ per month on boxing.

i$.($Click the icon to view allocation information.$)($Click the icon for additional information.$)$

If a desktop now uses $100$ parts, what is the new kitting cost assigned to one desktop? $($Round all calculations to the

nearest cent.$)$

A$.$ $$4\mathrm{.}00$

B$.$ $$5\mathrm{.}00$

C$.$ $$7\mathrm{.}00$

D$.$ $$8\mathrm{.}75$More info

Suppose Disc estimates it will use $125,000,000$ parts per month and ship products

with a total volume of $35,000,000$ cubic feet per month. Assume that each desktop

computer requires $175$ parts and has a volume of $13$ cubic feet. The predetermined

overhead allocation rate for kitting is $$0\mathrm{.}04$ per part and the predetermined

overhead allocation rate for boxing is $$0\mathrm{.}60$ per cubic foot. The kitting and boxing

costs assigned to one computer are $$7\mathrm{.}00$ and $$7\mathrm{.}80,$ respectively. Disc contracts

with its suppliers to pre$-$kit certain component parts before delivering them to Disc.

Assume this saves $$1,000,000$ of the kitting cost and reduces the total number of

parts by $45,000,000($because Disc considers each pre$-$kit as one part$).$