Compute it contracts with its suppliers to pre-kit, Accounting Basics

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Compute it contracts with its suppliers to pre-kit

Question:

Compute It contracts with its suppliers to pre-kit certain component parts before delivering them to Compute It. Assume this saves $2,000,000 of the kitting cost and reduces the total number of parts by 200,000,000 (because Compute It considers each pre-kit as one part). If a desktop now uses 90 parts, what is the new kitting cost assigned to one desktop?

a. $4.50 c. $2.70
b. $1.00 d. $3.75

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Accounting Basics: Compute it contracts with its suppliers to pre-kit

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Accounting Basics: Compute it contracts with its suppliers to pre-kit

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