(Activity-based costing) Barbizon Enterprises is in the process of instituting an activity-based costing project in its 10-person purchasing department. Annual departmental overhead costs are $390,000. 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.

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

b. If 80 units of the product are manufactured during the year, what is the purchasing department cost per unit?LO1.

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Activity Find best suppliers Issue purchase orders Review receiving reports Allocation Measure Quantity Total Cost Number of telephone calls Number of purchase orders 200,000 $200,000 25,000 Number of receiving reports 15,000 100,000 90,000 One special order product manufactured by the company required the following purchasing department activities: 150 telephone calls, 40 purchase orders, and 20 receipts.