Activity Current Activity Expected Activity Demand Activities Activity Driver Demand Material usage Capacity 180,000 38,000 180,000 180,000 Number of parts Direct labor hours Number of orders 38,000 Installing parts Purchasing parts 30,400 23,200 19,836 12,180 Additionally, the following activity cost data are provided: Material usage: $25 per specialized part used; $30 per commodity part; no fixed activity cost. Installing parts: $24 per direct labor hour, no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $45,000 annual salary; each clerk is capable of processing 5.800 purchase orders. Variable activity costs: $1.40 per purchase order processed for forms, postage, etc. Required: 1. Calculate the cost reduction produced by using commodity parts instead of specialized parts. Enter your answers as positive amounts. If required, round your answers to the nearest cent. Material usage cost reduction Labor usage cost reduction Purchasing cost reduction Total savings 2. Suppose that 58,000 units are being produced and sold for $9,000 per unit and that the price per unit will be reduced by the per-unit savings. What is the new price for the configured product? If required, round your intermediate calculations and final answer to the nearest cent. S 3. What if the expected activity demand for purchase orders was 9,860? How would this affect the answers to Requirements 1 and 2? If required, round your intermediate calculations and final answers to the nearest cent. Increase Total savings Decrease by to New price by S to S