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 kiting cost assigned to one desktop? $4.50 $1.00 $2.70 $3.75 Compute it can use ABC information for what decision? cost cutting pricing product mix All of the above Which of the following would be true for a service company? ABC helps the company make more informed decisions about services. Service companies use only a few activities, so a plant-wide overhead allocation is always appropriate. Most of the company's costs are for direct materials and direct labor. Indirect costs are a small proportion of total costs. All of the above are true. Companies enjoy many benefits from using JIT. Which is not a benefit of adopting JIT? Ability to respond quickly to changes in customer demand Lower inventory carrying costs Ability to continue production despite disruptions in deliveries of raw materials More space available for production Which of the following is the last step in developing an activity-based costing system? estimating the total quantity of the cost driver estimating the total indirect costs of each activity allocating costs to the cost object identifying the activities The cost of lost future sales after a customer finds a defect in a product is which type of quality cost? Prevention cost Appraisal cost Internal failure cost External failure cost Spending on testing a product before shipment to customers is which type of quality cost? External failure cost Prevention cost Appraisal cost None of the above