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QUESTION 29 Sav Sparrow Inc. wants to start using an activity-based costing system in order to improve the pricing of their products. The company's Purchasing Department incurs costs of $550,000 per year and has six employees. Purchasing has determined the three major activities that occur during the year: Activity Allocation Measure Number of People Total Cost Issuing purchase orders Number of purchase orders $ 150.000 Reviewing receiving reports Number of receiving reports CV $175,000 Making phone calls Number of phone calls $225,000 During the year, 50,000 phone calls were made in the department; 15,000 purchase orders were issed; and 10,000 shipments were received. Product A required 200 phone calls, 150 receiving reports and 50 purchase orders. Product B required 350 phone calls, 400 receiving reports, and 100 purchase orders a. Determine the amount of Purchasing Department cost that should be assigned to each of these products. b. Determine Purchasing Department cost per unit if 1,500 units of Product A and 3,000 units of Product B were manufactured during the year