Solution and Explanation:
The Overhead allocation rates are to be computed for determining the total cost of producing 1 unit of disc.
Total of 100 parts are used in disc . therfore, the total kitting cost per disc is ( 100 parts multiply with 0.05). Volume of cubic feet is used in one of the disc. therfore, the total boxing cost per disc is ( 9 cubic feet multiply with 0.80)
Total kitting cost per disc = $5.0
Total boxing cost per disc = $7.2
The total kitting cost and boxing cost for one desktop computer are computed by multiplying the allocation rate applicable for per unit of kitting and boxing with the total number of units needed.
Assuming the overhead rate applicable for per unit of kitting and boxing is the total cost incurred for one desktop computer.