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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
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 $12,000,000 per month on kitting and $13,000,000 per month on boxing. Disc 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 Disc estimates it will use 400,000,000 parts per month and ship products with a total volume of 20,000,000 cubic feet per month. Assume that each desktop computer requires 125 parts and has a volume of 9 cubic feet. The predetermined overhead allocation rate for kitting is $0.03 per part and the predetermined overhead allocation rate for boxing is $0.65 per cubic foot. What are the kitting and boxing costs assigned to one desktop computer? (Round all calculations to the nearest cent.)
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