Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individual jobs. To aid the study, the company provided the following data regarding its Purchasing Department and three of its many jobs: Number of employees Average salary per employee 11 $ 27,000 Weeks of employment per year 52 Hours worked per week 40 Practical capacity percentage 85% Minutes per unit of the activity Requisition Processing 15 Bid Evaluation Inspection 45 30 Job X Job Y Job Z Number of requisitions processed 6 3 2 Number of bid evaluations 4 3 5 Number of inspections 7 3 7 Now assume that Saratoga Company would like to answer the following "what if" question using its time-driven activity-based costing system: Assuming our estimated activity demands for all jobs in the next period will be as shown below, how will this affect our job costs and our staffing levels within the Purchasing Department? Activity demands for all jobs Required: Requisition Processing 8,300 Bid Evaluation Inspection 10,950 11,700 1. Will the revised activity demands affect the total Purchasing Department labor costs assigned to Job X, Job Y, and Job Z? 2. Using the revised activity demands, calculate Saratoga's used capacity in minutes. 3. Using the revised activity demands, calculate Saratoga's unused capacity in minutes. 4. Using the revised activity demands, calculate Saratoga's unused capacity in number of employees. (Round your answer to 2

Milligan Freelancing provides different services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system. Activity Cost Pool             Total Cost            Total Activity Consulting                           368,364              36,250 hours Bookkeeping                       142,500               8,100 jobs Client support                       37,620                680 clients Other                                  220,000                Not Applicable The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. One particular client, Adams Corporation requested 24 jobs during the year that required a total of 31 hours of service. For this service, the client was charged P1,750. Compute the increase/(decrease) in margin assuming Milligan Freelancing decides to use traditional costing system in which all costs are allocated…

Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Cost Pool Allocation Base Overhead Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the cost of machining per ceiling fan? Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Cost Pool Allocation Base Overhead Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the cost of machining per ceiling fan? $144.00 $18.00 $180.00 $30.00

Multiple Choice $6.49 $5.63 $3.92 $5.20