Quikprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Quikprint classifies its various printing jobs as standard jobs or special jobs. Quikprint’s simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Quikprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base.

Quikprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Quickprint’s ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. To see how activity-based costing would affect the costs of standard and special jobs, Quikprint collects the following information for the fiscal year 2011 that just ended.

                                    

Required
1. Calculate the cost of a standard job and a special job under the simple costing system.
2. Calculate the cost of a standard job and a special job under the activity-based costing system.
3. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job?
4. How might Quikprint use the new cost information from its activity-based costing system to better manage its business?