$5-25.$ ACTIVITY$-$BASED COS IING, SERVICE COMPANY. itine

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

Aniline 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. Aniline'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 machin$$ operations, marketing, and administration. To see how activity$-$based costing would affect the costs of standard and special jobs, Aniline collects the following information for the fiscal year $2020$ that just ended.

Required

Calculate the cost of a standard job and a special job under the simple costing system.

Calculate the cost of a standard job and a special job under the activity$-$based costing system.

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?

How might Aniline use the new cost information from its activitybased costing system to better manage its business?