ABC

Bernacke Corp. is instituting an activity$-$based costing project in its ten$-$person purchasing department. Annual departmental overhead costs are $$1,608,750.$ Because finding the best supplier takes the majority of effort in the department, most of the costs are allocated to this activity area. Many purchase orders are received in a single shipment.

Activity

Allocation Measure

Quantity

Total Cost

Find best suppliers

Number of telephone calls

$75,000$

$$825,000$

Issue purchase orders

Number of purchase orders

$46,875$

$412,500$

Review receiving reports

Number of receiving reports

$28,125$

$371,250$

$$

One special$-$order product manufactured by the company required the following purchasing department activities: $25$ telephone calls, $50$ purchase orders, and $35$ receipts.

a$.$ What amount of purchasing department cost should be assigned to this product?

Note:$$Round your final answer to two decimal places $($i$.$e$.$ round $$4\mathrm{.}355$ to $$4\mathrm{.}36).$

$$

b$.$ If $100$ units of the product are manufactured during the year, what is the purchasing department cost per unit?

Note:$$Round your final answer to two decimal places $($i$.$e$.$ round $$4\mathrm{.}355$ to $$4\mathrm{.}36).$

$$

c$.$ If purchasing department costs had been allocated using telephone calls as the allocation base, how much cost would have been assigned to this product?

Note:$$Round your final answer to two decimal places $($i$.$e$.$ round $$4\mathrm{.}355$ to $$4\mathrm{.}36).$